192 F.R.D. 568

COMMUNITIES FOR EQUITY
v.
MICHIGAN HIGH SCHOOL ATHLETIC ASSOCIATION

US District Court, WD Mich

Case No. 1:98 CV 479

April 19, 1999

JUDGES: RICHARD ALAN ENSLEN, Chief Judge.

OPINION BY: RICHARD ALAN ENSLEN

OPINION

This matter is before the Court on the Plaintiffs' Motion for Class Certification. For the reasons which follow, the motion will be granted.

BACKGROUND

Plaintiffs bring this suit against the Michigan High School Athletic Association and its Representative Council, alleging that they have been excluded from opportunities to participate in interscholastic athletic programs and have received unequal treatment and benefits in these programs. They contend that this putative exclusion and unequal treatment constitute gender discrimination, in violation of (1) Title IX of the Education Amendments of 1972; (2) the Equal Protection Clause of the Fourteenth Amendment; and (3) Mich. Comp. Laws §§ 37.2302 and 37.2402. The alleged discrimination is made manifest, according to Plaintiffs, in MHSAA's: (1) refusing to sanction girls ice hockey and water polo; (2) requiring that the Plaintiff Class play its sports in non-traditional seasons; (3) operating shorter athletic seasons for some girls' sports than for boys' sports; (4) scheduling the competitions of the Plaintiff Class on inferior dates; (5) providing, assigning, and operating inferior athletic facilities to the Plaintiff Class in which to play MHSAA-sanctioned games; (6) requiring that the Plaintiff Class play some sports under rules and/or conditions different fromthose in the NCAA or other governing organizations, unlike boys; and (7) allocating more resources for the support and promotion of male interscholastic athletic programs than for female programs.

Plaintiffs' Motion for Class Certification asks the Court to define the proposed class as follows: all present and future female students enrolled in MHSAA member schools who participate in interscholastic athletics or who are deterred from participating in interscholastic athletics because of Defendants' discriminatory conduct and who are adversely affected by that conduct.

Standard Class Certification

According to the United States Supreme Court, this Court must conduct a "rigorous analysis" into whether the prerequisites of Federal Rule of Civil Procedure 23 are met before certifying a class action. General Tel. Co. v. Falcon, 457 U.S. 147, 161, 72 L. Ed. 2d 740, 102 S. Ct. 2364 (1982). The trial court has broad discretion in deciding whether to certify a class, but that discretion must be exercised within the framework of Rule 23. Gulf Oil Co. v. Bernard, 452 U.S. 89, 100, 68 L. Ed. 2d 693, 101 S. Ct. 2193 (1981); In re American Medical Systems, Inc., 75 F.3d 1069, 1079 (6th Cir. 1996). The "rigorous analysis requirement" means that a class is not maintainable merely because the complaint parrots the legal requirements of Rule 23. American Med. Systems, 75 F.3d at 1079. Although a hearing prior to the class determination is not always required, "it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question." Falcon, 457 U.S. at 160; see also Weathers v. Peters Realty Corp., 499 F.2d 1197, 1200 (6th Cir. 1974) (stating that in some cases it will be necessary to give the parties an opportunity to present evidence on the certification question). In this case, the extensive briefing filed by the parties, the Court's past review of motions, and the documentary evidence and affidavits filed make the hearing of evidence unnecessary because the Court is able to probe behind the pleadings without additional evidence or argument.^[1]

Rule 23 places the burden of class certification on the Plaintiffs. In re American Medical Systems, 75 F.3d at 1079; Senter v. General Motors Corp., 532 F.2d 511, 522 (6th Cir. 1976). Under the language of the Rule, the Plaintiff must prove four prerequisites under subsection (a) and one of the prerequisites under subsection (b) for the class to be certified. The Rule provides in pertinent part as follows:

(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if

(1) the class is so numerous that joinder of all members is impracticable,

(2) there are questions of law or fact common to the class,

(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and

(4) the representative parties will fairly and adequately protect the interests of the class.

(b) Class Actions Maintainable. An action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition: (1) ****; or

(2) the party opposing the class has acted or refused to act on grounds generally applicable [**6] to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; ****

Fed. R. Civ. Proc. 23(a)-(b).

Class Certification

Rule 23(a)(1)--Numerosity/Impracticability of Joinder

First, the Court must determine whether the class is sufficiently numerous that joinder is impracticable. Numbers alone are not dispositive when the numbers are small, but will dictate impracticability when the numbers are large. H. Newberg and A. Conte, 1 Newberg on Class Actions, § 3.05 (3rd ed. 1992) [hereinafter "Newberg"]. A good faith estimate of the number of class members is sufficient to support a numerosity finding. See Gomez v. Illinois State Bd. of Educ., 117 F.R.D. 394, 399 (N.D. Ill. 1987). In this case, the numbers themselves justify a conclusion of numerosity and impracticability of joinder. Under Plaintiffs' theory of liability, thousands of female high school athletes and would-be athletes are subjected to Defendants' alleged discriminatory practices. In terms of specific numbers, Plaintiffs provide, for instance, evidence of 177 female ice hockey players, and 188 female water polo players, all of whom are allegedly discriminated against by Defendants' refusal to sanction those sports. Similarly, almost 20,000 female basketball players are allegedly injured by a season which is purportedly shorter than that played by boys. Other numbers are presented, but need not be addressed in detail. Suffice it to say, the numbers of alleged discriminatees is high. To the extent that this claim does not concern simply water polo players, but is about a broader claim of discrimination against female high school athletes, the class is surely so numerous as to render joinder impracticable.

Regarding the class membership of future and deterred students, the Court notes that they are appropriate class components, since they cannot be identified. See Kilgo v. Bowman Transp., Inc., 789 F.2d 859, 878 (11th Cir. 1986); Gomez, 117 F.R.D. at 399 (holding future class members are necessarily unidentifiable, and that their joinder is therefore impracticable.). See also Roman v. Korson, 152 F.R.D. 101, 111 (W.D. Mich. 1993) (Enslen, J.) (noting that inclusion of future class members avoids unnecessary harm and repetitive litigation). The Court concludes that the numerosity requirement is satisfied by the proposed class.

Rule 23(a)(2)--Commonality

Next, the Rule requires commonality--that there are questions of law and fact common to class members. Not every common question suffices. Sprague v. General Motors Corp., 133 F.3d 388, 397 (6th Cir. 1998). What is necessary for certification are common issues the resolution of which will advance the litigation. Id. In cases involving the question of whether a defendant has acted through an illegal policy or procedure, commonality is readily shown because the common question becomes whether the defendant in fact acted through the illegal policy or procedure. Van Vels v. Premier Athletic Center of Plainfield, Inc., 182 F.R.D. 500, 507 (W.D. Mich. 1998) (Enslen, J.). Where the nature of the legal claims are such that individuals would have to submit separate proofs to establish liability, class actions are disapproved due to lack of commonality. See, e.g., Sprague, 133 F.3d at 398 (class action disapproved as to estoppel which would require individual proof of reliance). However, the presence of individual questions need not defeat certification. See In re Prudential Ins. Co. of America Sales Lit., 148 F.3d 283, 310 (3rd Cir. 1998). This should be obvious, since Rule 23 requires common questions, not the absence of individual ones. Once it is determined that there are common questions of law and fact as to a legal claim, differences in damages sustained by class members will usually not defeat certification. Sterling v. Velsicol Chemical Corp., 855 F.2d 1188, 1197 (6th Cir. 1988); Kornberg v. Carnival Cruise Lines, Inc., 741 F.2d 1332 (11th Cir. 1984).

Here, the common questions of fact and law are obvious enough. The overarching question is, did MHSAA and its Representative Council act in a manner inconsistent with Title IX, the Equal Protection Clause of the Fourteenth Amendment; and/or Mich. Comp. Laws §§ 37.2302 and 37.2402? The answer turns on the resolution of factual questions regarding Defendants' decision making process and outcomes, and determination of the legal consequences of those facts.

Rule 23(a)(3)--Typicality

Rule 23 requires that the claims asserted by class representatives be typical of class members. American Med. Systems, 75 F.3d at 1082. As the Court of Appeals said in the American Medical Systems case:

"Typicality determines whether a sufficient relationship exists between the injury to the named plaintiff and the conduct affecting the class, so that the court may properly attribute a collective nature to the challenged conduct. . . ."

* * * *

. . . . A necessary consequence of the typicality requirement is that the representative's interests will be aligned with those of the represented group, and in pursuing his own claims, the named plaintiff will also advance the interests of the class members.

Id. (citation omitted). The typicality requirement, so explained, tends to merge with the commonality requirement. Falcon, 457 U.S. at 158 n.13. Nevertheless, it is a separate inquiry and in particular focuses attention on differences between class representative claims and class claims which would defeat the representative nature of the class action. Fuller v. Fruehauf Trailer Corp., 168 F.R.D. 588, 598 (E.D. Mich. 1996).

The typicality requirement is the one demanding the closest attention in this matter. The Court must determine whether, on the facts of this case, the Supreme Court's Falcon decision precludes a finding of typicality, given the breadth of Plaintiffs' claims. In Falcon, a Mexican-American employee who alleged that he had been denied a promotion because of race discrimination brought a class action against his employer. The class included all Mexican-American employees and Mexican-American applicants for employment who had not been hired. The class was certified pursuant to a Fifth Circuit rule which permitted "across-the-board" attacks on all racially discriminatory employment practices. The Fifth Circuit had held that it was permissible for "'an employee complaining of one employment practice to represent another complaining of another practice, if the plaintiff and the members of the class suffer from essentially the same injury. In this case, all of the claims are based on discrimination because of national origin.'" Falcon, 457 U.S. at 153 (quoting Falcon v. General Tel. Co., 626 F.2d 369, 375 (5th Cir. 1980)). The Supreme Court reversed, holding that:

Respondent's complaint provided an insufficient basis for concluding that the adjudication of his claim of discrimination in promotion would require the decision of any common question concerning the failure of petitioner to hire more Mexican-Americans. Without any specific presentation identifying the questions of law or fact that were common to the claims of respondent and of the members of the class he sought to represent, it was error for the District Court to presume that respondent's claim was typical of other claims against petitioner by Mexican-American employees and applicants. If one allegation of specific discriminatory treatment were sufficient to support an across-the-board attack, every Title VII case would be a potential company wide class action.

457 U.S. at 158-59.

At first blush, the Supreme Court's criticism of the class certification challenged in Falcon appears applicable in a case such as this. After all, a number of different harms are alleged here, which have not been suffered uniformly among the proposed class representatives. There are two reasons, however, that Falcon does not bar the certification of this class.

First, the various discrete harms alleged by Plaintiffs are all allegedly suffered by members of Communities for Equity, a proposed class representative. See Affidavits attached to Plaintiffs' Motion for Reconsideration, filed Nov. 25, 1998 (dkt. # 46). "Numerous decisions have recognized the ability of associations, both incorporated and unincorporated, to act as class representatives under Rule 23. These entities are afforded representative status, provided that the underlying purpose of the organization is to represent the interests of the class." Upper Valley Assoc. For Handicapped Citizens v. Mills, 168 F.R.D. 167, 171 (D. Vt. 1996). Since CFE exists for the very purpose of achieving gender equity in high school sports, and since its members allege the manifold harms contained in its complaint, it achieves typicality of injury and claims through its membership.

More importantly, however, the mere fact of some distinction between the particular claims of named Plaintiffs and the diverse manifestations of discrimination alleged here is insufficient to extinguish typicality. The Falcon Court provided for the possibility of broad-based attacks on discrimination if there were proof of an underlying policy of discrimination. 457 U.S. at 159 n.15. Here, the variety of alleged manifestations of discrimination, such as inequitable facilities, scheduling, sanctioning, and rules, present a sufficient case of an underlying policy or practice of discrimination.^[2] The Court determines that differences between sanctioning water polo and scheduling basketball are less significant in this matter than the typicality of claims that female high school athletes are discriminated against in violation of the various laws invoked by Plaintiffs. See, e.g., Grasty v. Amalgamated Cloth. & Textile Workers Union, 828 F.2d 123, 130 (3rd Cir. 1987) ("Although the named plaintiffs in this case do not share all of the claims of the class, since the various claims alleged appear to stem from a single course of conduct . . . we cannot conclude that the district court abused its discretion in holding that the typicality requirement was met."). See also In re Prudential Ins. Co. of America Sales Lit., 148 F.3d 283, 312 (3rd Cir. 1998) ("The various forms which [the class members] injuries may take do not negate a finding of typicality, provided the cause of those injuries is some common wrong."). The typicality requirement is therefore satisfied.

Rule 23(a)(4)--Adequacy of Representation

Rule 23(a) requires that the class members and their counsel be prepared to provide fair and adequate representation to the class. In Senter v. General Motors Corp., 532 F.2d 511, 525 (6th Cir. 1976), the Sixth Circuit Court of Appeals articulated two criteria for determining adequacy of representation: "1) the representative must have common interests with unnamed members of the class, and 2) it must appear that the representatives will vigorously prosecute the interests of the class through qualified counsel." Senter, 532 F.2d at 525; see also American Med. Systems, 75 F.3d at 1083. The 23(a)(4) requirement includes a requirement that there be no conflicts between the class representatives and the class. See Rutherford v. City of Cleveland, 137 F.3d 905, 909 (6th Cir. 1998). Two issues in this matter raise the potentiality for conflict.

First, it is quite possible that members of the class have no desire to pursue this action, and are not unhappy with the status quo. However, the proposed class purports to include only those who are "adversely affected." While this term is problematic, in that it is unclear whether it should be assessed subjectively or objectively, it appears to limit the class in a way to avoid conflict. As well, even without the limiting language, this sort of putative conflict generally fails to bar class certification. See Newberg at § 3.30 ("the class member who wishes to remain a victim of unlawful conduct does not have a legally cognizable conflict with the class representative"). See also Arthur v. Starrett City Associates, 98 F.R.D. 500, 506-07 (E.D.N.Y. 1983). But see Alston v. Virginia High School League, 184 F.R.D. 574, 1999 U.S. Dist. LEXIS 4316 (W.D. Va., 1999) (exhibit 2 to Defendants' Addendum to Brief in Opposition).

Moreover, as suggested by Plaintiffs, the interests of those class members who do not consider themselves adversely affected will be adequately represented by Defendants.^[3] See Dierks v. Thompson, 414 F.2d 453, 457 [13 Fed Rules Serv 2d 578] (1st Cir. 1969); Horton v. Goose Creek Indep. Sch. Dist., 690 F.2d 470, 487-88 [35 Fed Rules Serv 2d 303] (5th Cir. 1982). "As long as both those seeking to uphold and those desiring to strike the particular regulations are adequately represented, the suit may proceed as a class action." 7ACharles Alan Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure § 1768 (2nd ed. 1986).

A second type of potential conflict may be that achieving certain types of relief in this case could come at the expense of other types. For instance, MHSAA may experience legally justifiable financial constraints which make it impossible for it to sanction tournaments in both ice hockey and water polo.^[4] See Boucher v. Syracuse University, 164 F.3d 113 (2nd Cir. 1999). Should a conflict arise from the limited availability of resources, however, it may be resolved by the creation of subclasses. See id. at 119. In this case, the Court believes that the appropriate course is to defer consideration of any subclasses until the relief stage, if any, of this litigation. See Newberg at §§ 3.25 ("Potential conflicts relating to relief issues which would arise only if the plaintiffs succeed on common claims of liability on behalf of the class will not bar a finding of adequacy and may be resolved, when the need arises, by the formation of subclasses at the relief stage.") and 3.31. To the extent that the underlying issue in this case is one of unequal treatment and discrimination, the matter of whether to sanction a particular sport appears to be one relating to relief, rather than liability.

Adequacy of representation is also measured by the quality of class counsel. There is no argument here that counsel for Plaintiffs are unqualified. They are experienced in both Title IX litigation, and litigation generally. The Court determines that the requirements of Rule 23(a)(4) are satisfied.

Rule 23(b)(2)--Injunctive or Declaratory Relief

Under Rule 23(b)(2), the class action may be certified for injunctive or declaratory relief if the party opposing the relief requested has acted or refused to act on grounds generally applicable to the class, making the requests for such relief appropriate. The Sixth Circuit Court of Appeals has approved Rule 23(b)(2) certifications for cases involving equitable relief as to discrimination claims in light of the fact that the Advisory Committee recommended this use of the Rule in such cases. See Senter, 532 F.2d at 525-26.

Defendants argue that a class is unnecessary, because relief granted to named Plaintiffs would inure to the benefit of the class. The Sixth Circuit has disclaimed any necessity requirement for Rule 23(b)(2) certification. Penland v. Warren County Jail, 797 F.2d 332, 334 (6th Cir. 1986). Even if such a requirement existed, mootness concerns would suggest the necessity of certification.^[5]

To the extent that Defendants discriminate against female high shool athletes through unequal treatment, Defendants act or refuse to act on grounds generally applicable to the class. Injunctive relief is, of course, an appropriate remedy for discriminatory treatment. Rule 23(b)(2) certification is therefore appropriate.

23(b)(2) certification is therefore appropriate.

Conclusion

Therefore, it is the conclusion of this Court that the Motion for Class Certification shall be granted.^[6]

[1] Defendants raise a number of liability arguments in their briefing. While these may carry the day ultimately, that day has not yet arrived. The certification determination is not concerned with a plaintiff's success on the merits. See Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177, 40 L. Ed. 2d 732, 94 S. Ct. 2140 (1974) (stating that certification question concerns Rule 23 factors and not an assessment of the merits).

[2] If it should be shown by the conclusion of the litigation that such a policy were absent, there might be cause to remove the individual Plaintiffs as representatives for lack of typicality. CFE, however, might remain a viable representative.

[3] Query whether this obviates the need for the phrase, "and are adversely affected," in the class definition.

[4] The Court expresses no opinion on the viability of such a contention.

[5] Though Defendants are correct that mootness is unlikely, given the scheduling of this litigation.

[6] The parties are reminded, however, that under Fed. R. Civ. P. 23(c)(1), a certification order "may be altered or amended before a decision on the merits." The class definition, and the propriety of the class in its entirety, may change as the litigation progresses. See, e.g., supra p. 8 n.2, and p. 10.

[2546] Theodore B. Olson, Mark A. Perry, Amir C. Tayrani, Gibson, Dunn & Crutcher LLP, Washington, DC, Theodore J. Boutrous, Jr., Counsel of Record, Rachel S. Brass, Theane Evangelis Kapur, Gibson, Dunn & Crutcher LLP, Los Angeles, CA, for Petitioner.

Joseph M. Sellers, Christine E. Webber, Jenny R. Yang, Kalpana Kotagal, Cohen Milstein Sellers & Toll PLLC, Washington, D.C., Brad Seligman, Jocelyn D. Larkin, The Impact Fund, Berkeley, CA, Steven Stemerman, Elizabeth A. Lawrence, Davis, Cowell & Bowe, LLP, San Francisco, CA, Arcelia Hurtado, Noreen Farell, Equal Rights Advocates, San Francisco, CA, Sheila Y. Thomas, Law Office of Sheila Thomas, Oakland, CA, Stephen Tinkler, The Tinkler Law Firm, Santa Fe, NM, Merit Bennett, The Bennett Firm, Santa Fe, NM, Debra Gardner, Baltimore, MD, Shauna Marshall, Hastings College of the Law, San Francisco, CA, for Respondents.

Theodore B. Olson, Mark A. Perry, Amir C. Tayrani, Gibson, Dunn & Crutcher LLP, Washington, D.C., Theodore J. Boutrous, Jr., Counsel of Record, Rachel S. Brass, Theane Evangelis Kapur, Gibson, Dunn & Crutcher LLP, Los Angeles, CA, for Petitioner.

[2547] Justice SCALIA delivered the opinion of the Court.

We are presented with one of the most expansive class actions ever. The District Court and the Court of Appeals approved the certification of a class comprising about one and a half million plaintiffs, current and former female employees of petitioner Wal-Mart who allege that the discretion exercised by their local supervisors over pay and promotion matters violates Title VII by discriminating against women. In addition to injunctive and declaratory relief, the plaintiffs seek an award of backpay. We consider whether the certification of the plaintiff class was consistent with Federal Rules of Civil Procedure 23(a) and (b)(2).

I

A

Petitioner Wal-Mart is the Nation's largest private employer. It operates four types of retail stores throughout the country: Discount Stores, Supercenters, Neighborhood Markets, and Sam's Clubs. Those stores are divided into seven nationwide divisions, which in turn comprise 41 regions of 80 to 85 stores apiece. Each store has between 40 and 53 separate departments and 80 to 500 staff positions. In all, Wal-Mart operates approximately 3,400 stores and employs more than one million people.

Pay and promotion decisions at Wal-Mart are generally committed to local managers' broad discretion, which is exercised "in a largely subjective manner." 222 F.R.D. 137, 145 (N.D.Cal.2004). Local store managers may increase the wages of hourly employees (within limits) with only limited corporate oversight. As for salaried employees, such as store managers and their deputies, higher corporate authorities have discretion to set their pay within preestablished ranges.

Promotions work in a similar fashion. Wal-Mart permits store managers to apply their own subjective criteria when selecting candidates as "support managers," which is the first step on the path to management. Admission to Wal-Mart's management training program, however, does require that a candidate meet certain objective criteria, including an above-average performance rating, at least one year's tenure in the applicant's current position, and a willingness to relocate. But except for those requirements, regional and district managers have discretion to use their own judgment when selecting candidates for management training. Promotion to higher office—e.g., assistant manager, co-manager, or store manager—is similarly at the discretion of the employee's superiors after prescribed objective factors are satisfied.

B

The named plaintiffs in this lawsuit, representing the 1.5 million members of the certified class, are three current or former Wal-Mart employees who allege that the company discriminated against them on the basis of their sex by denying them equal pay or promotions, in violation of Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended, 42 U.S.C. § 2000e-1 et seq.^[1]

Betty Dukes began working at a Pittsburgh, California, Wal-Mart in 1994. She started as a cashier, but later sought and [2548] received a promotion to customer service manager. After a series of disciplinary violations, however, Dukes was demoted back to cashier and then to greeter. Dukes concedes she violated company policy, but contends that the disciplinary actions were in fact retaliation for invoking internal complaint procedures and that male employees have not been disciplined for similar infractions. Dukes also claims two male greeters in the Pittsburgh store are paid more than she is.

Christine Kwapnoski has worked at Sam's Club stores in Missouri and California for most of her adult life. She has held a number of positions, including a supervisory position. She claims that a male manager yelled at her frequently and screamed at female employees, but not at men. The manager in question "told her to `doll up,' to wear some makeup, and to dress a little better." App. 1003a.

The final named plaintiff, Edith Arana, worked at a Wal-Mart store in Duarte, California, from 1995 to 2001. In 2000, she approached the store manager on more than one occasion about management training, but was brushed off. Arana concluded she was being denied opportunity for advancement because of her sex. She initiated internal complaint procedures, whereupon she was told to apply directly to the district manager if she thought her store manager was being unfair. Arana, however, decided against that and never applied for management training again. In 2001, she was fired for failure to comply with Wal-Mart's timekeeping policy.

These plaintiffs, respondents here, do not allege that Wal-Mart has any express corporate policy against the advancement of women. Rather, they claim that their local managers' discretion over pay and promotions is exercised disproportionately in favor of men, leading to an unlawful disparate impact on female employees, see 42 U.S.C. § 2000e-2(k). And, respondents say, because Wal-Mart is aware of this effect, its refusal to cabin its managers' authority amounts to disparate treatment, see § 2000e-2(a). Their complaint seeks injunctive and declaratory relief, punitive damages, and backpay. It does not ask for compensatory damages.

Importantly for our purposes, respondents claim that the discrimination to which they have been subjected is common to all Wal-Mart's female employees. The basic theory of their case is that a strong and uniform "corporate culture" permits bias against women to infect, perhaps subconsciously, the discretionary decisionmaking of each one of Wal-Mart's thousands of managers—thereby making every woman at the company the victim of one common discriminatory practice. Respondents therefore wish to litigate the Title VII claims of all female employees at Wal-Mart's stores in a nationwide class action.

C

Class certification is governed by Federal Rule of Civil Procedure 23. Under Rule 23(a), the party seeking certification must demonstrate, first, that:

"(1) the class is so numerous that joinder of all members is impracticable,

"(2) there are questions of law or fact common to the class,

"(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and

"(4) the representative parties will fairly and adequately protect the interests of the class" (paragraph breaks added).

Second, the proposed class must satisfy at least one of the three requirements listed in Rule 23(b). Respondents rely on Rule 23(b)(2), which applies when "the party opposing the class has acted or refused to [2549] act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole."^[2]

Invoking these provisions, respondents moved the District Court to certify a plaintiff class consisting of "`[a]ll women employed at any Wal-Mart domestic retail store at any time since December 26, 1998, who have been or may be subjected to Wal-Mart's challenged pay and management track promotions policies and practices.'" 222 F.R.D., at 141-142 (quoting Plaintiff's Motion for Class Certification in case No. 3:01-cv-02252-CRB (ND Cal.), Doc. 99, p. 37). As evidence that there were indeed "questions of law or fact common to" all the women of Wal-Mart, as Rule 23(a)(2) requires, respondents relied chiefly on three forms of proof: statistical evidence about pay and promotion disparities between men and women at the company, anecdotal reports of discrimination from about 120 of Wal-Mart's female employees, and the testimony of a sociologist, Dr. William Bielby, who conducted a "social framework analysis" of Wal-Mart's "culture" and personnel practices, and concluded that the company was "vulnerable" to gender discrimination. 603 F.3d 571, 601 (C.A.9 2010) (en banc).

Wal-Mart unsuccessfully moved to strike much of this evidence. It also offered its own countervailing statistical and other proof in an effort to defeat Rule 23(a)'s requirements of commonality, typicality, and adequate representation. Wal-Mart further contended that respondents' monetary claims for backpay could not be certified under Rule 23(b)(2), first because that Rule refers only to injunctive and declaratory relief, and second because the backpay claims could not be manageably tried as a class without depriving Wal-Mart of its right to present certain statutory defenses. With one limitation not relevant here, the District Court granted respondents' motion and certified their proposed class.^[3]

D

A divided en banc Court of Appeals substantially affirmed the District Court's certification order. 603 F.3d 571. The majority concluded that respondents' evidence of commonality was sufficient to "raise the common question whether Wal-Mart's female employees nationwide were subjected to a single set of corporate policies (not merely a number of independent discriminatory acts) that may have worked to unlawfully discriminate against them in violation of Title VII." Id., at 612 (emphasis deleted). It also agreed with the District Court that the named plaintiffs' claims were sufficiently typical of the class [2550] as a whole to satisfy Rule 23(a)(3), and that they could serve as adequate class representatives, see Rule 23(a)(4). Id., at 614-615. With respect to the Rule 23(b)(2) question, the Ninth Circuit held that respondents' backpay claims could be certified as part of a (b)(2) class because they did not "predominat[e]" over the requests for declaratory and injunctive relief, meaning they were not "superior in strength, influence, or authority" to the nonmonetary claims. Id., at 616 (internal quotation marks omitted).^[4]

Finally, the Court of Appeals determined that the action could be manageably tried as a class action because the District Court could adopt the approach the Ninth Circuit approved in Hilao v. Estate of Marcos, 103 F.3d 767, 782-787 (1996). There compensatory damages for some 9,541 class members were calculated by selecting 137 claims at random, referring those claims to a special master for valuation, and then extrapolating the validity and value of the untested claims from the sample set. See 603 F.3d, at 625-626. The Court of Appeals "s[aw] no reason why a similar procedure to that used in Hilao could not be employed in this case." Id., at 627. It would allow Wal-Mart "to present individual defenses in the randomly selected `sample cases,' thus revealing the approximate percentage of class members whose unequal pay or nonpromotion was due to something other than gender discrimination." Ibid., n. 56 (emphasis deleted).

We granted certiorari. 562 U.S. ___, 131 S.Ct. 795, 178 L.Ed.2d 530 (2010).

II

The class action is "an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only." Califano v. Yamasaki, 442 U.S. 682, 700-701, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979). In order to justify a departure from that rule, "a class representative must be part of the class and `possess the same interest and suffer the same injury' as the class members." East Tex. Motor Freight System, Inc. v. Rodriguez, 431 U.S. 395, 403, 97 S.Ct. 1891, 52 L.Ed.2d 453 (1977) (quoting Schlesinger v. Reservists Comm. to Stop the War, 418 U.S. 208, 216, 94 S.Ct. 2925, 41 L.Ed.2d 706 (1974)). Rule 23(a) ensures that the named plaintiffs are appropriate representatives of the class whose claims they wish to litigate. The Rule's four requirements—numerosity, commonality, typicality, and adequate representation—"effectively `limit the class claims to those fairly encompassed by the named plaintiff's claims.'" General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 156, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982) (quoting General Telephone Co. of Northwest v. EEOC, 446 U.S. 318, 330, 100 S.Ct. 1698, 64 L.Ed.2d 319 (1980)).

A

The crux of this case is commonality—the rule requiring a plaintiff to show that "there are questions of law or fact [2551] common to the class." Rule 23(a)(2).^[5] That language is easy to misread, since "[a]ny competently crafted class complaint literally raises common `questions.'" Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U.L.Rev. 97, 131-132 (2009). For example: Do all of us plaintiffs indeed work for Wal-Mart? Do our managers have discretion over pay? Is that an unlawful employment practice? What remedies should we get? Reciting these questions is not sufficient to obtain class certification. Commonality requires the plaintiff to demonstrate that the class members "have suffered the same injury," Falcon, supra, at 157, 102 S.Ct. 2364. This does not mean merely that they have all suffered a violation of the same provision of law. Title VII, for example, can be violated in many ways—by intentional discrimination, or by hiring and promotion criteria that result in disparate impact, and by the use of these practices on the part of many different superiors in a single company. Quite obviously, the mere claim by employees of the same company that they have suffered a Title VII injury, or even a disparate-impact Title VII injury, gives no cause to believe that all their claims can productively be litigated at once. Their claims must depend upon a common contention—for example, the assertion of discriminatory bias on the part of the same supervisor. That common contention, moreover, must be of such a nature that it is capable of classwide resolution—which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.

"What matters to class certification ... is not the raising of common `questions'—even in droves—but, rather the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation. Dissimilarities within the proposed class are what have the potential to impede the generation of common answers." Nagareda, supra, at 132.

Rule 23 does not set forth a mere pleading standard. A party seeking class certification must affirmatively demonstrate his compliance with the Rule—that is, he must be prepared to prove that there are in fact sufficiently numerous parties, common questions of law or fact, etc. We recognized in Falcon that "sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question," 457 U.S., at 160, 102 S.Ct. 2364, and that certification is proper only if "the trial court is satisfied, after a rigorous analysis, that the prerequisites of Rule 23(a) have been satisfied," id., at 161, 102 S.Ct. 2364; see id., at 160, 102 S.Ct. 2364 ("[A]ctual, not presumed, conformance with Rule 23(a) remains ... indispensable"). Frequently that "rigorous analysis" will entail some overlap with the merits of the plaintiff's underlying claim. That cannot be helped. "`[T]he [2552] class determination generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'" Falcon, supra, at 160, 102 S.Ct. 2364 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 469, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978); some internal quotation marks omitted).^[6] Nor is there anything unusual about that consequence: The necessity of touching aspects of the merits in order to resolve preliminary matters, e.g., jurisdiction and venue, is a familiar feature of litigation. See Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676-677 (C.A.7 2001) (Easterbrook, J.).

In this case, proof of commonality necessarily overlaps with respondents' merits contention that Wal-Mart engages in a pattern or practice of discrimination.^[7] That is so because, in resolving an individual's Title VII claim, the crux of the inquiry is "the reason for a particular employment decision," Cooper v. Federal Reserve Bank of Richmond, 467 U.S. 867, 876, 104 S.Ct. 2794, 81 L.Ed.2d 718 (1984). Here respondents wish to sue about literally millions of employment decisions at once. Without some glue holding the alleged reasons for all those decisions together, it will be impossible to say that examination of all the class members' claims for relief will produce a common answer to the crucial question why was I disfavored.

B

This Court's opinion in Falcon describes how the commonality issue must be [2553] approached. There an employee who claimed that he was deliberately denied a promotion on account of race obtained certification of a class comprising all employees wrongfully denied promotions and all applicants wrongfully denied jobs. 457 U.S., at 152, 102 S.Ct. 2364. We rejected that composite class for lack of commonality and typicality, explaining:

"Conceptually, there is a wide gap between (a) an individual's claim that he has been denied a promotion [or higher pay] on discriminatory grounds, and his otherwise unsupported allegation that the company has a policy of discrimination, and (b) the existence of a class of persons who have suffered the same injury as that individual, such that the individual's claim and the class claim will share common questions of law or fact and that the individual's claim will be typical of the class claims." Id., at 157-158, 102 S.Ct. 2364.

Falcon suggested two ways in which that conceptual gap might be bridged. First, if the employer "used a biased testing procedure to evaluate both applicants for employment and incumbent employees, a class action on behalf of every applicant or employee who might have been prejudiced by the test clearly would satisfy the commonality and typicality requirements of Rule 23(a)." Id., at 159, n. 15, 102 S.Ct. 2364. Second, "[s]ignificant proof that an employer operated under a general policy of discrimination conceivably could justify a class of both applicants and employees if the discrimination manifested itself in hiring and promotion practices in the same general fashion, such as through entirely subjective decisionmaking processes." Ibid. We think that statement precisely describes respondents' burden in this case. The first manner of bridging the gap obviously has no application here; Wal-Mart has no testing procedure or other companywide evaluation method that can be charged with bias. The whole point of permitting discretionary decisionmaking is to avoid evaluating employees under a common standard.

The second manner of bridging the gap requires "significant proof" that Wal-Mart "operated under a general policy of discrimination." That is entirely absent here. Wal-Mart's announced policy forbids sex discrimination, see App. 1567a-1596a, and as the District Court recognized the company imposes penalties for denials of equal employment opportunity, 222 F.R.D., at 154. The only evidence of a "general policy of discrimination" respondents produced was the testimony of Dr. William Bielby, their sociological expert. Relying on "social framework" analysis, Bielby testified that Wal-Mart has a "strong corporate culture," that makes it "`vulnerable'" to "gender bias." Id., at 152. He could not, however, "determine with any specificity how regularly stereotypes play a meaningful role in employment decisions at Wal-Mart. At his deposition... Dr. Bielby conceded that he could not calculate whether 0.5 percent or 95 percent of the employment decisions at Wal-Mart might be determined by stereotyped thinking." 222 F.R.D. 189, 192 (N.D.Cal.2004). The parties dispute whether Bielby's testimony even met the standards for the admission of expert testimony under Federal Rule of Civil Procedure 702 and our Daubert case, see Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993).^[8] The District Court concluded [2554] that Daubert did not apply to expert testimony at the certification stage of class-action proceedings. 222 F.R.D., at 191. We doubt that is so, but even if properly considered, Bielby's testimony does nothing to advance respondents' case. "[W]hether 0.5 percent or 95 percent of the employment decisions at Wal-Mart might be determined by stereotyped thinking" is the essential question on which respondents' theory of commonality depends. If Bielby admittedly has no answer to that question, we can safely disregard what he has to say. It is worlds away from "significant proof" that Wal-Mart "operated under a general policy of discrimination."

C

The only corporate policy that the plaintiffs' evidence convincingly establishes is Wal-Mart's "policy" of allowing discretion by local supervisors over employment matters. On its face, of course, that is just the opposite of a uniform employment practice that would provide the commonality needed for a class action; it is a policy against having uniform employment practices. It is also a very common and presumptively reasonable way of doing business—one that we have said "should itself raise no inference of discriminatory conduct," Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 990, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988).

To be sure, we have recognized that, "in appropriate cases," giving discretion to lower-level supervisors can be the basis of Title VII liability under a disparate-impact theory—since "an employer's undisciplined system of subjective decisionmaking [can have] precisely the same effects as a system pervaded by impermissible intentional discrimination." Id., at 990-991, 108 S.Ct. 2777. But the recognition that this type of Title VII claim "can" exist does not lead to the conclusion that every employee in a company using a system of discretion has such a claim in common. To the contrary, left to their own devices most managers in any corporation— and surely most managers in a corporation that forbids sex discrimination— would select sex-neutral, performance-based criteria for hiring and promotion that produce no actionable disparity at all. Others may choose to reward various attributes that produce disparate impact— such as scores on general aptitude tests or educational achievements, see Griggs v. Duke Power Co., 401 U.S. 424, 431-432, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971). And still other managers may be guilty of intentional discrimination that produces a sex-based disparity. In such a company, demonstrating the invalidity of one manager's use of discretion will do nothing to demonstrate the invalidity of another's. A party seeking to certify a nationwide class will be unable to show that all the employees' Title VII claims will in fact depend on the answers to common questions.

Respondents have not identified a common mode of exercising discretion that [2555] pervades the entire company—aside from their reliance on Dr. Bielby's social frameworks analysis that we have rejected. In a company of Wal-Mart's size and geographical scope, it is quite unbelievable that all managers would exercise their discretion in a common way without some common direction. Respondents attempt to make that showing by means of statistical and anecdotal evidence, but their evidence falls well short.

The statistical evidence consists primarily of regression analyses performed by Dr. Richard Drogin, a statistician, and Dr. Marc Bendick, a labor economist. Drogin conducted his analysis region-by-region, comparing the number of women promoted into management positions with the percentage of women in the available pool of hourly workers. After considering regional and national data, Drogin concluded that "there are statistically significant disparities between men and women at Wal-Mart... [and] these disparities ... can be explained only by gender discrimination." 603 F.3d, at 604 (internal quotation marks omitted). Bendick compared work-force data from Wal-Mart and competitive retailers and concluded that Wal-Mart "promotes a lower percentage of women than its competitors." Ibid.

Even if they are taken at face value, these studies are insufficient to establish that respondents' theory can be proved on a classwide basis. In Falcon, we held that one named plaintiff's experience of discrimination was insufficient to infer that "discriminatory treatment is typical of [the employer's employment] practices." 457 U.S., at 158, 102 S.Ct. 2364. A similar failure of inference arises here. As Judge Ikuta observed in her dissent, "[i]nformation about disparities at the regional and national level does not establish the existence of disparities at individual stores, let alone raise the inference that a companywide policy of discrimination is implemented by discretionary decisions at the store and district level." 603 F.3d, at 637. A regional pay disparity, for example, may be attributable to only a small set of Wal-Mart stores, and cannot by itself establish the uniform, store-by-store disparity upon which the plaintiffs' theory of commonality depends.

There is another, more fundamental, respect in which respondents' statistical proof fails. Even if it established (as it does not) a pay or promotion pattern that differs from the nationwide figures or the regional figures in all of Wal-Mart's 3,400 stores, that would still not demonstrate that commonality of issue exists. Some managers will claim that the availability of women, or qualified women, or interested women, in their stores' area does not mirror the national or regional statistics. And almost all of them will claim to have been applying some sex-neutral, performance-based criteria—whose nature and effects will differ from store to store. In the landmark case of ours which held that giving discretion to lower-level supervisors can be the basis of Title VII liability under a disparate-impact theory, the plurality opinion conditioned that holding on the corollary that merely proving that the discretionary system has produced a racial or sexual disparity is not enough. "[T]he plaintiff must begin by identifying the specific employment practice that is challenged." Watson, 487 U.S., at 994, 108 S.Ct. 2777; accord, Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 656, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989) (approving that statement), superseded by statute on other grounds, 42 U.S.C. § 2000e-2(k). That is all the more necessary when a class of plaintiffs is sought to be certified. Other than the bare existence of delegated discretion, respondents have identified no "specific employment practice"—much less one that ties all their 1.5 million claims [2556] together. Merely showing that Wal-Mart's policy of discretion has produced an overall sex-based disparity does not suffice.

Respondents' anecdotal evidence suffers from the same defects, and in addition is too weak to raise any inference that all the individual, discretionary personnel decisions are discriminatory. In Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977), in addition to substantial statistical evidence of companywide discrimination, the Government (as plaintiff) produced about 40 specific accounts of racial discrimination from particular individuals. See id., at 338, 97 S.Ct. 1843. That number was significant because the company involved had only 6,472 employees, of whom 571 were minorities, id., at 337, 97 S.Ct. 1843, and the class itself consisted of around 334 persons, United States v. T.I.M.E.-D.C., Inc., 517 F.2d 299, 308 (C.A.5 1975), overruled on other grounds, Teamsters, supra. The 40 anecdotes thus represented roughly one account for every eight members of the class. Moreover, the Court of Appeals noted that the anecdotes came from individuals "spread throughout" the company who "for the most part" worked at the company's operational centers that employed the largest numbers of the class members. 517 F.2d, at 315, and n. 30. Here, by contrast, respondents filed some 120 affidavits reporting experiences of discrimination—about 1 for every 12,500 class members—relating to only some 235 out of Wal-Mart's 3,400 stores. 603 F.3d, at 634 (Ikuta, J., dissenting). More than half of these reports are concentrated in only six States (Alabama, California, Florida, Missouri, Texas, and Wisconsin); half of all States have only one or two anecdotes; and 14 States have no anecdotes about Wal-Mart's operations at all. Id., at 634-635, and n. 10. Even if every single one of these accounts is true, that would not demonstrate that the entire company "operate[s] under a general policy of discrimination," Falcon, supra, at 159, n. 15, 102 S.Ct. 2364, which is what respondents must show to certify a companywide class.^[9]

The dissent misunderstands the nature of the foregoing analysis. It criticizes our focus on the dissimilarities between the putative class members on the ground that we have "blend[ed]" Rule 23(a)(2)'s commonality requirement with Rule 23(b)(3)'s inquiry into whether common questions "predominate" over individual ones. See post, at 2550-2552 (GINSBURG, J., concurring in part and dissenting in part). That is not so. We quite agree that for purposes of Rule 23(a)(2) "`[e]ven a single [common] question'" will do, post, at 2566, n. 9 (quoting Nagareda, The Preexistence Principle and the Structure of the Class Action, 103 Colum. L.Rev. 149, 176, n. 110 (2003)). We consider dissimilarities not in order to determine (as Rule 23(b)(3) requires) whether common questions predominate, but in order to determine (as Rule 23(a)(2) requires) whether there is "[e]ven a single [common] question." And there is not here. Because respondents provide no convincing proof of a companywide discriminatory pay and promotion policy, we have concluded that they have [2557] not established the existence of any common question.^[10]

In sum, we agree with Chief Judge Kozinski that the members of the class:

"held a multitude of different jobs, at different levels of Wal-Mart's hierarchy, for variable lengths of time, in 3,400 stores, sprinkled across 50 states, with a kaleidoscope of supervisors (male and female), subject to a variety of regional policies that all differed .... Some thrived while others did poorly. They have little in common but their sex and this lawsuit." 603 F.3d, at 652 (dissenting opinion).

III

We also conclude that respondents' claims for backpay were improperly certified under Federal Rule of Civil Procedure 23(b)(2). Our opinion in Ticor Title Ins. Co. v. Brown, 511 U.S. 117, 121, 114 S.Ct. 1359, 128 L.Ed.2d 33 (1994) (per curiam) expressed serious doubt about whether claims for monetary relief may be certified under that provision. We now hold that they may not, at least where (as here) the monetary relief is not incidental to the injunctive or declaratory relief.

A

Rule 23(b)(2) allows class treatment when "the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole." One possible reading of this provision is that it applies only to requests for such injunctive or declaratory relief and does not authorize the class certification of monetary claims at all. We need not reach that broader question in this case, because we think that, at a minimum, claims for individualized relief (like the backpay at issue here) do not satisfy the Rule. The key to the (b)(2) class is "the indivisible nature of the injunctive or declaratory remedy warranted—the notion that the conduct is such that it can be enjoined or declared unlawful only as to all of the class members or as to none of them." Nagareda, 84 N.Y.U.L.Rev., at 132. In other words, Rule 23(b)(2) applies only when a single injunction or declaratory judgment would provide relief to each member of the class. It does not authorize class certification when each individual class member would be entitled to a different injunction or declaratory judgment against the defendant. Similarly, it does not authorize class certification when each class member would be entitled to an individualized award of monetary damages.

That interpretation accords with the history of the Rule. Because Rule 23 "stems from equity practice" that predated its codification, Amchem Products, Inc. v. Windsor, 521 U.S. 591, 613, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), in determining its meaning we have previously looked to the historical models on which the Rule was based, Ortiz v. Fibreboard Corp., 527 U.S. 815, 841-845, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999). As we observed in Amchem, "[c]ivil rights cases against parties charged with unlawful, class-based discrimination are prime examples" of what (b)(2) is meant to capture. 521 U.S., at 614, 117 [2558] S.Ct. 2231. In particular, the Rule reflects a series of decisions involving challenges to racial segregation—conduct that was remedied by a single classwide order. In none of the cases cited by the Advisory Committee as examples of (b)(2)'s antecedents did the plaintiffs combine any claim for individualized relief with their classwide injunction. See Advisory Committee's Note, 39 F.R.D. 69, 102 (1966) (citing cases); e.g., Potts v. Flax, 313 F.2d 284, 289, n. 5 (C.A.5 1963); Brunson v. Board of Trustees of Univ. of School Dist. No. 1, Clarendon Cty., 311 F.2d 107, 109 (C.A.4 1962) (per curiam); Frasier v. Board of Trustees of N.C., 134 F.Supp. 589, 593 (NC 1955) (three-judge court), aff'd, 350 U.S. 979, 76 S.Ct. 467, 100 L.Ed. 848 (1956).

Permitting the combination of individualized and classwide relief in a (b)(2) class is also inconsistent with the structure of Rule 23(b). Classes certified under (b)(1) and (b)(2) share the most traditional justifications for class treatment—that individual adjudications would be impossible or unworkable, as in a(b)(1) class,^[11] or that the relief sought must perforce affect the entire class at once, as in a (b)(2) class. For that reason these are also mandatory classes: The Rule provides no opportunity for (b)(1) or (b)(2) class members to opt out, and does not even oblige the District Court to afford them notice of the action. Rule 23(b)(3), by contrast, is an "adventuresome innovation" of the 1966 amendments, Amchem, 521 U.S., at 614, 117 S.Ct. 2231 (internal quotation marks omitted), framed for situations "in which `class-action treatment is not as clearly called for'," id., at 615, 117 S.Ct. 2231 (quoting Advisory Committee's Notes, 28 U.S.C.App., p. 697 (1994 ed.)). It allows class certification in a much wider set of circumstances but with greater procedural protections. Its only prerequisites are that "the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Rule 23(b)(3). And unlike (b)(1) and (b)(2) classes, the (b)(3) class is not mandatory; class members are entitled to receive "the best notice that is practicable under the circumstances" and to withdraw from the class at their option. See Rule 23(c)(2)(B).

Given that structure, we think it clear that individualized monetary claims belong in Rule 23(b)(3). The procedural protections attending the (b)(3) class—predominance, superiority, mandatory notice, and the right to opt out—are missing from (b)(2) not because the Rule considers them unnecessary, but because it considers them unnecessary to a (b)(2) class. When a class seeks an indivisible injunction benefitting all its members at once, there is no reason to undertake a case-specific inquiry into whether class issues predominate or whether class action is a superior method of adjudicating the dispute. Predominance and superiority are self-evident. But with respect to each class member's individualized claim for money, that is not so—which [2559] is precisely why (b)(3) requires the judge to make findings about predominance and superiority before allowing the class. Similarly, (b)(2) does not require that class members be given notice and opt-out rights, presumably because it is thought (rightly or wrongly) that notice has no purpose when the class is mandatory, and that depriving people of their right to sue in this manner complies with the Due Process Clause. In the context of a class action predominantly for money damages we have held that absence of notice and opt-out violates due process. See Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 812, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985). While we have never held that to be so where the monetary claims do not predominate, the serious possibility that it may be so provides an additional reason not to read Rule 23(b)(2) to include the monetary claims here.

B

Against that conclusion, respondents argue that their claims for backpay were appropriately certified as part of a class under Rule 23(b)(2) because those claims do not "predominate" over their requests for injunctive and declaratory relief. They rely upon the Advisory Committee's statement that Rule 23(b)(2) "does not extend to cases in which the appropriate final relief relates exclusively or predominantly to money damages." 39 F.R.D., at 102 (emphasis added). The negative implication, they argue, is that it does extend to cases in which the appropriate final relief relates only partially and nonpredominantly to money damages. Of course it is the Rule itself, not the Advisory Committee's description of it, that governs. And a mere negative inference does not in our view suffice to establish a disposition that has no basis in the Rule's text, and that does obvious violence to the Rule's structural features. The mere "predominance" of a proper (b)(2) injunctive claim does nothing to justify elimination of Rule 23(b)(3)'s procedural protections: It neither establishes the superiority of class adjudication over individual adjudication nor cures the notice and opt-out problems. We fail to see why the Rule should be read to nullify these protections whenever a plaintiff class, at its option, combines its monetary claims with a request—even a "predominating request"—for an injunction.

Respondents' predominance test, moreover, creates perverse incentives for class representatives to place at risk potentially valid claims for monetary relief. In this case, for example, the named plaintiffs declined to include employees' claims for compensatory damages in their complaint. That strategy of including only backpay claims made it more likely that monetary relief would not "predominate." But it also created the possibility (if the predominance test were correct) that individual class members' compensatory-damages claims would be precluded by litigation they had no power to hold themselves apart from. If it were determined, for example, that a particular class member is not entitled to backpay because her denial of increased pay or a promotion was not the product of discrimination, that employee might be collaterally estopped from independently seeking compensatory damages based on that same denial. That possibility underscores the need for plaintiffs with individual monetary claims to decide for themselves whether to tie their fates to the class representatives' or go it alone—a choice Rule 23(b)(2) does not ensure that they have.

The predominance test would also require the District Court to reevaluate the roster of class members continually. The Ninth Circuit recognized the necessity for this when it concluded that those plaintiffs [2560] no longer employed by Wal-Mart lack standing to seek injunctive or declaratory relief against its employment practices. The Court of Appeals' response to that difficulty, however, was not to eliminate all former employees from the certified class, but to eliminate only those who had left the company's employ by the date the complaint was filed. That solution has no logical connection to the problem, since those who have left their Wal-Mart jobs since the complaint was filed have no more need for prospective relief than those who left beforehand. As a consequence, even though the validity of a (b)(2) class depends on whether "final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole," Rule 23(b)(2) (emphasis added), about half the members of the class approved by the Ninth Circuit have no claim for injunctive or declaratory relief at all. Of course, the alternative (and logical) solution of excising plaintiffs from the class as they leave their employment may have struck the Court of Appeals as wasteful of the District Court's time. Which indeed it is, since if a backpay action were properly certified for class treatment under (b)(3), the ability to litigate a plaintiff's backpay claim as part of the class would not turn on the irrelevant question whether she is still employed at Wal-Mart. What follows from this, however, is not that some arbitrary limitation on class membership should be imposed but that the backpay claims should not be certified under Rule 23(b)(2) at all.

Finally, respondents argue that their backpay claims are appropriate for a (b)(2) class action because a backpay award is equitable in nature. The latter may be true, but it is irrelevant. The Rule does not speak of "equitable" remedies generally but of injunctions and declaratory judgments. As Title VII itself makes pellucidly clear, backpay is neither. See 42 U.S.C. § 2000e-5(g)(2)(B)(i) and (ii) (distinguishing between declaratory and injunctive relief and the payment of "backpay," see § 2000e-5(g)(2)(A)).

C

In Allison v. Citgo Petroleum Corp., 151 F.3d 402, 415 (C.A.5 1998), the Fifth Circuit held that a (b)(2) class would permit the certification of monetary relief that is "incidental to requested injunctive or declaratory relief," which it defined as "damages that flow directly from liability to the class as a whole on the claims forming the basis of the injunctive or declaratory relief." In that court's view, such "incidental damage should not require additional hearings to resolve the disparate merits of each individual's case; it should neither introduce new substantial legal or factual issues, nor entail complex individualized determinations." Ibid. We need not decide in this case whether there are any forms of "incidental" monetary relief that are consistent with the interpretation of Rule 23(b)(2) we have announced and that comply with the Due Process Clause. Respondents do not argue that they can satisfy this standard, and in any event they cannot.

Contrary to the Ninth Circuit's view, Wal-Mart is entitled to individualized determinations of each employee's eligibility for backpay. Title VII includes a detailed remedial scheme. If a plaintiff prevails in showing that an employer has discriminated against him in violation of the statute, the court "may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, [including] reinstatement or hiring of employees, with or without backpay ... or any other equitable relief as the court deems appropriate." § 2000e-5(g)(1). But if the employer can show that it took an adverse employment action against an employee for any [2561] reason other than discrimination, the court cannot order the "hiring, reinstatement, or promotion of an individual as an employee, or the payment to him of any backpay." § 2000e-5(g)(2)(A).

We have established a procedure for trying pattern-or-practice cases that gives effect to these statutory requirements. When the plaintiff seeks individual relief such as reinstatement or backpay after establishing a pattern or practice of discrimination, "a district court must usually conduct additional proceedings ... to determine the scope of individual relief." Teamsters, 431 U.S., at 361, 97 S.Ct. 1843. At this phase, the burden of proof will shift to the company, but it will have the right to raise any individual affirmative defenses it may have, and to "demonstrate that the individual applicant was denied an employment opportunity for lawful reasons." Id., at 362, 97 S.Ct. 1843.

The Court of Appeals believed that it was possible to replace such proceedings with Trial by Formula. A sample set of the class members would be selected, as to whom liability for sex discrimination and the backpay owing as a result would be determined in depositions supervised by a master. The percentage of claims determined to be valid would then be applied to the entire remaining class, and the number of (presumptively) valid claims thus derived would be multiplied by the average backpay award in the sample set to arrive at the entire class recovery— without further individualized proceedings. 603 F.3d, at 625-627. We disapprove that novel project. Because the Rules Enabling Act forbids interpreting Rule 23 to "abridge, enlarge or modify any substantive right," 28 U.S.C. § 2072(b); see Ortiz, 527 U.S., at 845, 119 S.Ct. 2295, a class cannot be certified on the premise that Wal-Mart will not be entitled to litigate its statutory defenses to individual claims. And because the necessity of that litigation will prevent backpay from being "incidental" to the classwide injunction, respondents' class could not be certified even assuming, arguendo, that "incidental" monetary relief can be awarded to a 23(b)(2) class.

* * *

The judgment of the Court of Appeals is

Reversed.

Justice GINSBURG, with whom Justice BREYER, Justice SOTOMAYOR, and Justice KAGAN join, concurring in part and dissenting in part.

The class in this case, I agree with the Court, should not have been certified under Federal Rule of Civil Procedure 23(b)(2). The plaintiffs, alleging discrimination in violation of Title VII, 42 U.S.C. § 2000e et seq., seek monetary relief that is not merely incidental to any injunctive or declaratory relief that might be available. See ante, at 2557-2561. A putative class of this type may be certifiable under Rule 23(b)(3), if the plaintiffs show that common class questions "predominate" over issues affecting individuals—e.g., qualification for, and the amount of, backpay or compensatory damages—and that a class action is "superior" to other modes of adjudication.

Whether the class the plaintiffs describe meets the specific requirements of Rule 23(b)(3) is not before the Court, and I would reserve that matter for consideration and decision on remand.^[12] The Court, [2562] however, disqualifies the class at the starting gate, holding that the plaintiffs cannot cross the "commonality" line set by Rule 23(a)(2). In so ruling, the Court imports into the Rule 23(a) determination concerns properly addressed in a Rule 23(b)(3) assessment.

I

A

Rule 23(a)(2) establishes a preliminary requirement for maintaining a class action: "[T]here are questions of law or fact common to the class."^[13] The Rule "does not require that all questions of law or fact raised in the litigation be common," 1 H. Newberg & A. Conte, Newberg on Class Actions § 3.10, pp. 3-48 to 3-49 (3d ed.1992); indeed, "[e]ven a single question of law or fact common to the members of the class will satisfy the commonality requirement," Nagareda, The Preexistence Principle and the Structure of the Class Action, 103 Colum. L.Rev. 149, 176, n. 110 (2003). See Advisory Committee's 1937 Notes on Fed. Rule Civ. Proc. 23, 28 U.S.C.App., p. 138 (citing with approval cases in which "there was only a question of law or fact common to" the class members).

A "question" is ordinarily understood to be "[a] subject or point open to controversy." American Heritage Dictionary 1483 (3d ed.1992). See also Black's Law Dictionary 1366 (9th ed.2009) (defining "question of fact" as "[a] disputed issue to be resolved... [at] trial" and "question of law" as "[a]n issue to be decided by the judge"). Thus, a "question" "common to the class" must be a dispute, either of fact or of law, the resolution of which will advance the determination of the class members' claims.^[14]

B

The District Court, recognizing that "one significant issue common to the class may be sufficient to warrant certification," 222 F.R.D. 137, 145 (N.D.Cal.2004), found that the plaintiffs easily met that test. Absent an error of law or an abuse of discretion, an appellate tribunal has no warrant to upset the District Court's finding of commonality. See Califano v. Yamasaki, 442 U.S. 682, 703, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979) ("[M]ost issues arising under Rule 23 ... [are] committed in the first instance to the discretion of the district court.").

The District Court certified a class of "[a]ll women employed at any Wal-Mart domestic retail store at any time since December 26, 1998." 222 F.R.D., at 141-143 (internal quotation marks omitted). The named plaintiffs, led by Betty Dukes, propose to litigate, on behalf of the class, allegations that Wal-Mart discriminates on the basis of gender in pay and promotions. [2563] They allege that the company "[r]eli[es] on gender stereotypes in making employment decisions such as ... promotion[s][and] pay." App. 55a. Wal-Mart permits those prejudices to infect personnel decisions, the plaintiffs contend, by leaving pay and promotions in the hands of "a nearly all male managerial workforce" using "arbitrary and subjective criteria." Ibid. Further alleged barriers to the advancement of female employees include the company's requirement, "as a condition of promotion to management jobs, that employees be willing to relocate." Id., at 56a. Absent instruction otherwise, there is a risk that managers will act on the familiar assumption that women, because of their services to husband and children, are less mobile than men. See Dept. of Labor, Federal Glass Ceiling Commission, Good for Business: Making Full Use of the Nation's Human Capital 151 (1995).

Women fill 70 percent of the hourly jobs in the retailer's stores but make up only "33 percent of management employees." 222 F.R.D., at 146. "[T]he higher one looks in the organization the lower the percentage of women." Id., at 155. The plaintiffs'"largely uncontested descriptive statistics" also show that women working in the company's stores "are paid less than men in every region" and "that the salary gap widens over time even for men and women hired into the same jobs at the same time." Ibid.; cf. Ledbetter v. Goodyear Tire & Rubber Co., 550 U.S. 618, 643, 127 S.Ct. 2162, 167 L.Ed.2d 982 (2007) (GINSBURG, J., dissenting).

The District Court identified "systems for ... promoting in-store employees" that were "sufficiently similar across regions and stores" to conclude that "the manner in which these systems affect the class raises issues that are common to all class members." 222 F.R.D., at 149. The selection of employees for promotion to in-store management "is fairly characterized as a `tap on the shoulder' process," in which managers have discretion about whose shoulders to tap. Id., at 148. Vacancies are not regularly posted; from among those employees satisfying minimum qualifications, managers choose whom to promote on the basis of their own subjective impressions. Ibid.

Wal-Mart's compensation policies also operate uniformly across stores, the District Court found. The retailer leaves open a $2 band for every position's hourly pay rate. Wal-Mart provides no standards or criteria for setting wages within that band, and thus does nothing to counter unconscious bias on the part of supervisors. See id., at 146-147.

Wal-Mart's supervisors do not make their discretionary decisions in a vacuum. The District Court reviewed means Wal-Mart used to maintain a "carefully constructed... corporate culture," such as frequent meetings to reinforce the common way of thinking, regular transfers of managers between stores to ensure uniformity throughout the company, monitoring of stores "on a close and constant basis," and "Wal-Mart TV," "broadcas[t] ... into all stores." Id., at 151-153 (internal quotation marks omitted).

The plaintiffs' evidence, including class members' tales of their own experiences,^[15] suggests that gender bias suffused Wal-Mart's company culture. Among illustrations, [2564] senior management often refer to female associates as "little Janie Qs." Plaintiffs' Motion for Class Certification in No. 3:01-cv-02252-CRB (ND Cal.), Doc. 99, p. 13 (internal quotation marks omitted). One manager told an employee that "[m]en are here to make a career and women aren't." 222 F.R.D., at 166 (internal quotation marks omitted). A committee of female Wal-Mart executives concluded that "[s]tereotypes limit the opportunities offered to women." Plaintiffs' Motion for Class Certification in No. 3:01-cv-02252-CRB (ND Cal.), Doc. 99, at 16 (internal quotation marks omitted).

Finally, the plaintiffs presented an expert's appraisal to show that the pay and promotions disparities at Wal-Mart "can be explained only by gender discrimination and not by ... neutral variables." 222 F.R.D., at 155. Using regression analyses, their expert, Richard Drogin, controlled for factors including, inter alia, job performance, length of time with the company, and the store where an employee worked. Id., at 159.^[16] The results, the District Court found, were sufficient to raise an "inference of discrimination." Id., at 155-160.

C

The District Court's identification of a common question, whether Wal-Mart's pay and promotions policies gave rise to unlawful discrimination, was hardly infirm. The practice of delegating to supervisors large discretion to make personnel decisions, uncontrolled by formal standards, has long been known to have the potential to produce disparate effects. Managers, like all humankind, may be prey to biases of which they are unaware.^[17] The risk of discrimination is heightened when those managers are predominantly of one sex, and are steeped in a corporate culture that perpetuates gender stereotypes.

The plaintiffs' allegations resemble those in one of the prototypical cases in this area, Leisner v. New York Tel. Co., 358 F.Supp. 359, 364-365 (S.D.N.Y.1973). In deciding on promotions, supervisors in that case were to start with objective measures; but ultimately, they were to "look at the individual as a total individual." Id., at 365 (internal quotation marks omitted). The final question they were to ask and answer: "Is this person going to be successful in our business?" Ibid. (internal quotation marks omitted). It is hardly surprising that for many managers, the ideal candidate was someone with characteristics similar to their own.

We have held that "discretionary employment practices" can give rise to Title [2565] VII claims, not only when such practices are motivated by discriminatory intent but also when they produce discriminatory results. See Watson v. Fort Worth Bank & Trust, 487 U.S. 977, 988, 991, 108 S.Ct. 2777, 101 L.Ed.2d 827 (1988). But see ante, at 2555 ("[P]roving that [a] discretionary system has produced a ... disparity is not enough."). In Watson, as here, an employer had given its managers large authority over promotions. An employee sued the bank under Title VII, alleging that the "discretionary promotion system" caused a discriminatory effect based on race. 487 U.S., at 984, 108 S.Ct. 2777 (internal quotation marks omitted). Four different supervisors had declined, on separate occasions, to promote the employee. Id., at 982, 108 S.Ct. 2777. Their reasons were subjective and unknown. The employer, we noted "had not developed precise and formal criteria for evaluating candidates"; "[i]t relied instead on the subjective judgment of supervisors." Ibid.

Aware of "the problem of subconscious stereotypes and prejudices," we held that the employer's "undisciplined system of subjective decisionmaking" was an "employment practic[e]" that "may be analyzed under the disparate impact approach." Id., at 990-991, 108 S.Ct. 2777. See also Wards Cove Packing Co. v. Atonio, 490 U.S. 642, 657, 109 S.Ct. 2115, 104 L.Ed.2d 733 (1989) (recognizing "the use of `subjective decision making'" as an "employment practic[e]" subject to disparate-impact attack).

The plaintiffs' allegations state claims of gender discrimination in the form of biased decisionmaking in both pay and promotions. The evidence reviewed by the District Court adequately demonstrated that resolving those claims would necessitate examination of particular policies and practices alleged to affect, adversely and globally, women employed at Wal-Mart's stores. Rule 23(a)(2), setting a necessary but not a sufficient criterion for classaction certification, demands nothing further.

II

A

The Court gives no credence to the key dispute common to the class: whether Wal-Mart's discretionary pay and promotion policies are discriminatory. See ante, at 2551 ("Reciting" questions like "Is [giving managers discretion over pay] an unlawful employment practice?" "is not sufficient to obtain class certification."). "What matters," the Court asserts, "is not the raising of common `questions,'" but whether there are "[d]issimilarities within the proposed class" that "have the potential to impede the generation of common answers." Ante, at 2551 (quoting Nagareda, Class Certification in the Age of Aggregate Proof, 84 N.Y.U.L.Rev. 97, 132 (2009); some internal quotation marks omitted).

The Court blends Rule 23(a)(2)'s threshold criterion with the more demanding criteria of Rule 23(b)(3), and thereby elevates the (a)(2) inquiry so that it is no longer "easily satisfied," 5 J. Moore et al., Moore's Federal Practice § 23.23[2], p. 23-72 (3d ed.2011).^[18] Rule 23(b)(3) certification [2566] requires, in addition to the four 23(a) findings, determinations that "questions of law or fact common to class members predominate over any questions affecting only individual members" and that "a class action is superior to other available methods for ... adjudicating the controversy."^[19]

The Court's emphasis on differences between class members mimics the Rule 23(b)(3) inquiry into whether common questions "predominate" over individual issues. And by asking whether the individual differences "impede" common adjudication, ante, at 2551-2552 (internal quotation marks omitted), the Court duplicates 23(b)(3)'s question whether "a class action is superior" to other modes of adjudication. Indeed, Professor Nagareda, whose "dissimilarities" inquiry the Court endorses, developed his position in the context of Rule 23(b)(3). See 84 N.Y.U.L.Rev., at 131 (Rule 23(b)(3) requires "some decisive degree of similarity across the proposed class" because it "speaks of common `questions' that `predominate' over individual ones").^[20] "The Rule 23(b)(3) predominance inquiry" is meant to "tes[t] whether proposed classes are sufficiently cohesive to warrant adjudication by representation." Amchem Products, Inc. v. Windsor, 521 U.S. 591, 623, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). If courts must conduct a "dissimilarities" analysis at the Rule 23(a)(2) stage, no mission remains for Rule 23(b)(3).

Because Rule 23(a) is also a prerequisite for Rule 23(b)(1) and Rule 23(b)(2) classes, the Court's "dissimilarities" position is far reaching. Individual differences should not bar a Rule 23(b)(1) or Rule 23(b)(2) class, so long as the Rule 23(a) threshold is met. See Amchem Products, 521 U.S., at 623, n. 19, 117 S.Ct. 2231 (Rule 23(b)(1)(B) "does not have a predominance requirement"); Yamasaki, 442 U.S., at 701, 99 S.Ct. 2545 (Rule 23(b)(2) action in which the Court noted that "[i]t is unlikely that differences in the factual background of each claim will affect the outcome of the legal issue"). For example, in Franks v. Bowman Transp. Co., 424 U.S. 747, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976), a Rule 23(b)(2) class of African-American truckdrivers complained that the defendant had [2567] discriminatorily refused to hire black applicants. We recognized that the "qualification[s] and performance" of individual class members might vary. Id., at 772, 96 S.Ct. 1251 (internal quotation marks omitted). "Generalizations concerning such individually applicable evidence," we cautioned, "cannot serve as a justification for the denial of [injunctive] relief to the entire class." Ibid.

B

The "dissimilarities" approach leads the Court to train its attention on what distinguishes individual class members, rather than on what unites them. Given the lack of standards for pay and promotions, the majority says, "demonstrating the invalidity of one manager's use of discretion will do nothing to demonstrate the invalidity of another's." Ante, at 2554.

Wal-Mart's delegation of discretion over pay and promotions is a policy uniform throughout all stores. The very nature of discretion is that people will exercise it in various ways. A system of delegated discretion, Watson held, is a practice actionable under Title VII when it produces discriminatory outcomes. 487 U.S., at 990-991, 108 S.Ct. 2777; see supra, at 2564-2565. A finding that Wal-Mart's pay and promotions practices in fact violate the law would be the first step in the usual order of proof for plaintiffs seeking individual remedies for company-wide discrimination. Teamsters v. United States, 431 U.S. 324, 359, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); see Albemarle Paper Co. v. Moody, 422 U.S. 405, 415-423, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). That each individual employee's unique circumstances will ultimately determine whether she is entitled to backpay or damages, § 2000e-5(g)(2)(A) (barring backpay if a plaintiff "was refused ... advancement... for any reason other than discrimination"), should not factor into the Rule 23(a)(2) determination.

* * *

The Court errs in importing a "dissimilarities" notion suited to Rule 23(b)(3) into the Rule 23(a) commonality inquiry. I therefore cannot join Part II of the Court's opinion.

[1] The complaint included seven named plaintiffs, but only three remain part of the certified class as narrowed by the Court of Appeals.

[2] Rule 23(b)(1) allows a class to be maintained where "prosecuting separate actions by or against individual class members would create a risk of" either "(A) inconsistent or varying adjudications," or "(B) adjudications.. . that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impeded their ability to protect their interests." Rule 23(b)(3) states that a class may be maintained where "questions of law or fact common to class members predominate over any questions affecting only individual members," and a class action would be "superior to other available methods for fairly and efficiently adjudicating the controversy." The applicability of these provisions to the plaintiff class is not before us.

[3] The District Court excluded backpay claims based on promotion opportunities that had not been publicly posted, for the reason that no applicant data could exist for such positions. 222 F.R.D. 137, 182 (N.D.Cal.2004). It also decided to afford class members notice of the action and the right to opt-out of the class with respect to respondents' punitive-damages claim. Id., at 173.

[4] To enable that result, the Court of Appeals trimmed the (b)(2) class in two ways: First, it remanded that part of the certification order which included respondents' punitive-damages claim in the (b)(2) class, so that the District Court might consider whether that might cause the monetary relief to predominate. 603 F.3d, at 621. Second, it accepted in part Wal-Mart's argument that since class members whom it no longer employed had no standing to seek injunctive or declaratory relief, as to them monetary claims must predominate. It excluded from the certified class "those putative class members who were no longer Wal-Mart employees at the time Plaintiffs' complaint was filed," id., at 623 (emphasis added).

[5] We have previously stated in this context that "[t]he commonality and typicality requirements of Rule 23(a) tend to merge. Both serve as guideposts for determining whether under the particular circumstances maintenance of a class action is economical and whether the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence. Those requirements therefore also tend to merge with the adequacy-of-representation requirement, although the latter requirement also raises concerns about the competency of class counsel and conflicts of interest." General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 157-158, n. 13, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). In light of our disposition of the commonality question, however, it is unnecessary to resolve whether respondents have satisfied the typicality and adequate-representation requirements of Rule 23(a).

[6] A statement in one of our prior cases, Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974), is sometimes mistakenly cited to the contrary: "We find nothing in either the language or history of Rule 23 that gives a court any authority to conduct a preliminary inquiry into the merits of a suit in order to determine whether it may be maintained as a class action." But in that case, the judge had conducted a preliminary inquiry into the merits of a suit, not in order to determine the propriety of certification under Rules 23(a) and (b) (he had already done that, see id.,at 165, 94 S.Ct. 2140), but in order to shift the cost of notice required by Rule 23(c)(2) from the plaintiff to the defendants. To the extent the quoted statement goes beyond the permissibility of a merits inquiry for any other pretrial purpose, it is the purest dictum and is contradicted by our other cases.

Perhaps the most common example of considering a merits question at the Rule 23 stage arises in class-action suits for securities fraud. Rule 23(b)(3)'s requirement that "questions of law or fact common to class members predominate over any questions affecting only individual members" would often be an insuperable barrier to class certification, since each of the individual investors would have to prove reliance on the alleged misrepresentation. But the problem dissipates if the plaintiffs can establish the applicability of the so-called "fraud on the market" presumption, which says that all traders who purchase stock in an efficient market are presumed to have relied on the accuracy of a company's public statements. To invoke this presumption, the plaintiffs seeking 23(b)(3) certification must prove that their shares were traded on an efficient market, Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. ___, ___, 131 S.Ct. 2179, 2185, ___ L.Ed.2d ___, 2011 WL 2175208 (2011) (slip op., at 5), an issue they will surely have to prove again at trial in order to make out their case on the merits.

[7] In a pattern-or-practice case, the plaintiff tries to "establish by a preponderance of the evidence that ... discrimination was the company's standard operating procedure[,] the regular rather than the unusual practice." Teamsters v. United States, 431 U.S. 324, 358, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977); see also Franks v. Bowman Transp. Co., 424 U.S. 747, 772, 96 S.Ct. 1251, 47 L.Ed.2d 444 (1976). If he succeeds, that showing will support a rebuttable inference that all class members were victims of the discriminatory practice, and will justify "an award of prospective relief," such as "an injunctive order against the continuation of the discriminatory practice." Teamsters, supra, at 361, 97 S.Ct. 1843.

[8] Bielby's conclusions in this case have elicited criticism from the very scholars on whose conclusions he relies for his social-framework analysis. See Monahan, Walker, & Mitchell, Contextual Evidence of Gender Discrimination: The Ascendance of "Social Frameworks," 94 Va. L.Rev. 1715, 1747 (2008) ("[Bielby's] research into conditions and behavior at Wal-Mart did not meet the standards expected of social scientific research into stereotyping and discrimination"); id., at 1745, 1747 ("[A] social framework necessarily contains only general statements about reliable patterns of relations among variables ... and goes no further .... Dr. Bielby claimed to present a social framework, but he testified about social facts specific to Wal-Mart"); id., at 1747-1748 ("Dr. Bielby's report provides no verifiable method for measuring and testing any of the variables that were crucial to his conclusions and reflects nothing more than Dr. Bielby's `expert judgment' about how general stereotyping research applied to all managers across all of Wal-Mart's stores nationwide for the multi-year class period").

[9] The dissent says that we have adopted "a rule that a discrimination claim, if accompanied by anecdotes, must supply them in numbers proportionate to the size of the class." Post, at 2563, n. 4 (GINSBURG, J., concurring in part and dissenting in part). That is not quite accurate. A discrimination claimant is free to supply as few anecdotes as he wishes. But when the claim is that a company operates under a general policy of discrimination, a few anecdotes selected from literally millions of employment decisions prove nothing at all.

[10] For this reason, there is no force to the dissent's attempt to distinguish Falcon on the ground that in that case there were "`no common questions of law or fact' between the claims of the lead plaintiff and the applicant class" post, at 2565-2566, n. 7 (quoting Falcon, 457 U.S., at 162, 102 S.Ct. 2364 (BURGER, C.J., concurring in part and dissenting in part)). Here also there is nothing to unite all of the plaintiffs' claims, since (contrary to the dissent's contention, post, at 2565-2566, n. 7), the same employment practices do not "touch and concern all members of the class."

[11] Rule 23(b)(1) applies where separate actions by or against individual class members would create a risk of "establish[ing] incompatible standards of conduct for the party opposing the class," Rule 23(b)(1)(A), such as "where the party is obliged by law to treat the members of the class alike," Amchem Products, Inc. v. Windsor, 521 U.S. 591, 614, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997), or where individual adjudications "as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests," Rule 23(b)(1)(B), such as in "`limited fund' cases, ... in which numerous persons make claims against a fund insufficient to satisfy all claims," Amchem, supra, at 614, 117 S.Ct. 2231.

[12] The plaintiffs requested Rule 23(b)(3) certification as an alternative, should their request for (b)(2) certification fail. Plaintiffs' Motion for Class Certification in No. 3:01-cv-02252-CRB (ND Cal.), Doc. 99, p. 47.

[13] Rule 23(a) lists three other threshold requirements for class-action certification: "(1) the class is so numerous that joinder of all members is impracticable"; "(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class." The numerosity requirement is clearly met and Wal-Mart does not contend otherwise. As the Court does not reach the typicality and adequacy requirements, ante, at 2551, n. 5, I will not discuss them either, but will simply record my agreement with the District Court's resolution of those issues.

[14] The Court suggests Rule 23(a)(2) must mean more than it says. See ante, at 2550-2552. If the word "questions" were taken literally, the majority asserts, plaintiffs could pass the Rule 23(a)(2) bar by "[r]eciting . . . questions" like "Do all of us plaintiffs indeed work for Wal-Mart?" Ante, at 2551. Sensibly read, however, the word "questions" means disputed issues, not any utterance crafted in the grammatical form of a question.

[15] The majority purports to derive from Teamsters v. United States, 431 U.S. 324, 97 S.Ct. 1843, 52 L.Ed.2d 396 (1977), a rule that a discrimination claim, if accompanied by anecdotes, must supply them in numbers proportionate to the size of the class. Ante, at 17-18. Teamsters, the Court acknowledges, see ante, at 2556, n. 9, instructs that statistical evidence alone may suffice, 431 U.S., at 339, 97 S.Ct. 1843; that decision can hardly be said to establish a numerical floor before anecdotal evidence can be taken into account.

[16] The Court asserts that Drogin showed only average differences at the "regional and national level" between male and female employees. Ante, at 2555 (internal quotation marks omitted). In fact, his regression analyses showed there were disparities within stores. The majority's contention to the contrary reflects only an arcane disagreement about statistical method—which the District Court resolved in the plaintiffs' favor. 222 F.R.D. 137, 157 (N.D.Cal.2004). Appellate review is no occasion to disturb a trial court's handling of factual disputes of this order.

[17] An example vividly illustrates how subjective decisionmaking can be a vehicle for discrimination. Performing in symphony orchestras was long a male preserve. Goldin and Rouse, Orchestrating Impartiality: The Impact of "Blind" Auditions on Female Musicians, 90 Am. Econ. Rev. 715, 715-716 (2000). In the 1970's orchestras began hiring musicians through auditions open to all comers. Id., at 716. Reviewers were to judge applicants solely on their musical abilities, yet subconscious bias led some reviewers to disfavor women. Orchestras that permitted reviewers to see the applicants hired far fewer female musicians than orchestras that conducted blind auditions, in which candidates played behind opaque screens. Id., at 738.

[18] The Court places considerable weight on General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 102 S.Ct. 2364, 72 L.Ed.2d 740 (1982). Ante, at 2553. That case has little relevance to the question before the Court today. The lead plaintiff in Falcon alleged discrimination evidenced by the company's failure to promote him and other Mexican-American employees and failure to hire Mexican-American applicants. There were "no common questions of law or fact" between the claims of the lead plaintiff and the applicant class. 457 U.S., at 162, 102 S.Ct. 2364 (Burger, C. J., concurring in part and dissenting in part) (emphasis added). The plaintiff-employee alleged that the defendant-employer had discriminated against him intentionally. The applicant class claims, by contrast, were "advanced under the `adverse impact' theory," ibid., appropriate for facially neutral practices. "[T]he only commonality [wa]s that respondent is a Mexican-American and he seeks to represent a class of Mexican-Americans." Ibid. Here the same practices touch and concern all members of the class.

[19]"A class action may be maintained if Rule 23(a) is satisfied and if:

"(1) prosecuting separate actions by or against individual class members would create a risk of ... inconsistent or varying adjudications... [or] adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members .. .;

"(2) the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief... is appropriate respecting the class as a whole; or

"(3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. Rule Civ. Proc. 23(b) (paragraph breaks added).

[20] Cf. supra, at 2545 (Rule 23(a) commonality prerequisite satisfied by "[e]ven a single question... common to the members of the class" (quoting Nagareda, The Preexistence Principle and the Structure of the Class Action, 103 Colum. L.Rev. 149, 176, n. 110 (2003).

[735] Bettye A. Barrios, Johnson, Johnson, Barrios & Yacoubian, New Orleans, LA, Melvin M. Belli, San Francisco, CA, Joseph M. Bruno, Bruno & Bruno, New Orleans, LA, Kenneth M. Carter, New Orleans, LA, Bruce C. Dean, New Orleans, LA, Wendell H. Gauthier, Daniel G. Abel, Dana Kim Cormier, Julie B. Beiser, Gauthier & Murphy, Metairie, LA, Christopher M. Guidroz, New Orleans, LA, John B. Krentel, Metairie, LA, Walter J. Leger, Jr., New Orleans, LA, Arthur R. Miller, Cambridge, MA, Ronald L. Motley, Charleston, SC, Stephen B. Murray, New Orleans, LA, Charles W. Patrick, Jr., Charleston, SC, Robert Leland Redfearn, Jr., New Orleans, LA, Michael X. St. Martin, Houma, LA, Scott McCullen Baldwin, John Browning Baldwin, Baldwin & Baldwin, Marshall, TX, Calvin Clifford Fayard, Jr., Denham Springs, LA, Robert D. Greenbaum, Philadelphia, PA, George Febiger Riess, New Orleans, LA, Peter J. Butler, Jr., Deutsch, Kerrigan & Stiles, New Orleans, LA, Andrew W. Hutton, Wichita, KS, Wells Talbot Watson, Lake Charles, LA, Richard M. Heimann, Lieff, Cabraser, Heimann, Bernstein, San Francisco, CA, Ralph Irving Knowles, Jr., Atlanta, GA, Arnold Levin, Levin, Fishbein, Sedran and Berman, Philadelphia, PA, John R. Climaco, Climaco, Climaco, Seminatore, Lefkowitz and Garofoli, Cleveland, OH, Jodi W. Flowers, Susan Nial, Ness, Motley, Loadholt, Richardson & Poole, Charleston, SC, Russ M. Herman, Herman, Herman, Katz & Cotlar, New Orleans, LA, Francis "Brother" Hare, Jr., Hare, Wynn, Newell & Newton, Birmingham, AL, Gayle L. Troutwine, Michael L. Williams, Williams and Troutwine, Portlant, OR, John P. Kopesky, Sheller, Ludwig & Badey, Philadelphia, PA, Stanley M. Chesley, Waite & Schneider, Cincinnati, OH, John P. Coale, Diane E. Cooley, Coale, Allen & Van Susteren, Washington, DC, Margaret Moses Branch, Branch Law Firm, Albuquerque, NM, Perry Weitz, New York City, Louie J. Roussel, III, Metairie, LA, Edwin Rene Murray, Edwin R. Murray & Associates, New Orleans, LA, Sherrill Patricia Hondorf, Waite, Schneider, Bayless & Chesley, Cincinnati, OH, Elizabeth Joan Cabraser, Steven E. Fineman, Lieff, Cabraser, Heimann & Barnstein, San Francisco, CA, Dianne M. Nast, Roda & Nast, Lancaster, PA, Richard Alan Daynard, Northeastern University School of Law, Boston, MA, Jorge Ortiz-Brunet, Ortiz, Toro & Ortiz-Brunet, Hato Rey, PR, Charles Zimmerman, Zimmerman & Reed, Minneapolis, MN, Jack David Maistros, Michael V. Kelly, Cleveland, OH, Martis Ann Brachtl, Brian Campf, Goodkind, Labaton, Rudoff & Sucharow, New York City, Kenneth S. Canfield, Atlanta, GA, Louis Gottlieb, New York City, William O. Dougherty, San Diego, CA, Edwin David Hoskins, John C.M. Angelos, Office of Peter G. Angelos, Towson, MD, Daniel E. Becnel, Jr., Becnel, Landry & Becnel, Reserve, LA, for plaintiffs-appellees.

Peter J. McKenna, Skadden, Arps, Slate, Meagher & Flom, New York City, Kenneth Winston Starr, Kirkland & Ellis, Washington, DC, Paul R. Duke, Covington & Burling, Washington, DC, Thomas E. Silfen, Laura Jean Hines, Arnold & Porter, Washington, DC, Robert C. Heim, Dechert, Price & Rhoads, Philadelphia, PA, for all defendants-appellants.

Joy Goldberg Braun, Robert E. Winn, Sessions & Fishman, New Orleans, LA, Bruce [736] G. Sheffler, Thomas E. Bezanson, Mary T. Yelenick, Chadbourne & Parke, New York City, for American Tobacco Co. and American Brands Incorporated.

Carmelite M. Bertaut, Charles L. Chassaignac, Peter A. Feringa, Jr., Chaffe, McCall, Phillips, Toler & Sarpy, New Orleans, LA, for Lorillard, Inc., R.J. Reynolds Tobacco Co., Brown & Williamson Tobacco Corp., Batus Holdings, Inc., and Batus, Inc.

James Thomas Newsom, Shook, Hardy & Bacon, Kansas City, MO, for Lorillard, Inc., Phillip Morris, Inc., Brown & Williamson Tobacco Corp., Batus Holdings, Inc., Batus, Inc., Loews Corp., Philip Morris Companies, Inc., and Lorrillard Tobacco Co.

John Mason McCollam, Steven W. Copley, Gordon, Arata, McCollam & Duplantis, New Orleans, LA, for Lorillard, Inc., Loews Corp., and Lorrillard Tobacco Co.

Gary R. Long, James A. Wilson, Shook, Hardy & Bacon, Kansas City, MO, for Lorillard, Inc., Phillip Morris, Inc., Brown & Williamson Tobacco Corp., Batus Holdings, Inc., Batus, Inc., Loews Corp., Philip Morris Companies, Inc., and Lorrillard Tobacco Co.

Allen Rennie Purvis, Kansas City, MO, for Phillip Morris Incorporated.

Scott Edward Delacroix, Charles F. Gay, Jr., Thomas J. Wyllie, Adams and Reese, New Orleans, LA, for Phillip Morris, Inc., and Philip Morris Companies, Inc.

Stephen H. Kupperman, Phillip A. Wittmann, Stone, Pigman, Walther, Wittmann & Hutchinson, New Orleans, LA, for RJR Nabisco, Inc. and R.J. Reynolds Tobacco Co.

Dorothy Hudson Wimberly, Stone, Pigman, Walther, Wittmann & Hutchinson, New Orleans, LA, S. Ann Saucer, Powell & Associates, Dallas, TX, Paul G. Crist, Cleveland, OH, Theodore Martin Grossman, Hugh R. Whiting, Mark A. Belasic, Jones, Day, Reavis & Pogue, Cleveland, OH, for R.J. Reynolds Tobacco Co.

Madeleine M. Fischer, New Orleans, LA, Joseph J. Lowenthal, Jr., John J. Weigel, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, LA, James V. Kearney, Mudge, Rose, Guthrie, Alexander & Ferdon, New Orleans, LA, Aaron H. Marks, Kasowitz, Benson, Torres & Friedman, New York City, for Liggett Group, Inc., Liggett & Myers, Inc., and Brooke Group, Ltd.

Francis K. Decker, Jr., New York City, for Liggett Group Incorporated.

Griffin B. Bell, Richard A. Schneider, King & Spalding, Atlanta, GA, Gordon A. Smith, Atlanta, GA, Steven D. McCormick, Michelle H. Browdy, Andrew R. McGaan, Chicago, IL, David M. Bernick, Chicago, IL, for Brown & Williamson Tobacco Corp.

Charles William Schmidt, III, Christovich & Kearney, New Orleans, LA, for U.S. Tobacco Co., Loews Corp., and UST, Inc.

Alan H. Goodman, Thomas Mente Benjamin, Lemle & Kelleher, New Orleans, LA, for The Tobacco Institute, Inc.

Linda Susan Mullenix, Austin, TX, Jan S. Amundson, National Association of Manufacturers, Washington, DC, for National Association of Manufacturers (NAM) amicus curiae.

Stephen A. Bokat, Washington, DC, Robin S. Conrad, Washington, DC, for Chamber of Commerce of the U.S. amicus curiae.

John H. Beisner, Brian David Boyle, Barton Samuel Aronson, O'Melveny & Myers, Washington, DC, Hugh F. Young, Jr., Product Liability Advisory Council, Reston, VA, for Product Liability Advisory Council (PLAC) amicus curiae.

Paul D. Kamenar, Washington Legal Foundation, Washington, DC, Daniel J. Popeo, Washington, DC, Arvin Maskin, Konrad L. Cailteux, John H. Bae, David L. Yohai, Weil, Gotshal & Manges, New York City, for Washington Legal Foundation, amicus curiae.

Jack R. Bierig, Bruce M. Zessar, Sidley & Austin, Chicago, IL, for American Medical Association amicus curiae.

Gloria M. Janata, The Children's Health Fund, New York City, for Children's Health Fund amicus curiae.

Katherine J. Pohlman, Edina, MN, for National Association of School Nurses amicus curiae.

Matthew L. Myers, Asbill, Junkin & Myers, Washington, DC, for American Heart [737] Ass'n, American Cancer Soc., and American Lung Ass'n, amicus curiae.

Carol L. Galloway, Department of Health and Hospitals for the State of Louisiana, Baton Rouge, LA, for Louisiana Department of Health and Hospitals amicus curiae.

Before SMITH, DUHÉ and DeMOSS, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

In what may be the largest class action ever attempted in federal court, the district court in this case embarked "on a road certainly less traveled, if ever taken at all," Castano v. American Tobacco Co., 160 F.R.D. 544, 560 (E.D.La.1995) (citing EDWARD C. LATHAM, THE POETRY OF ROBERT FROST, "THE ROAD NOT TAKEN" 105 (1969)), and entered a class certification order. The court defined the class as:

(a) All nicotine-dependent persons in the United States ... who have purchased and smoked cigarettes manufactured by the defendants;

(b) the estates, representatives, and administrators of these nicotine-dependent cigarette smokers; and

(c) the spouses, children, relatives and "significant others" of these nicotine-dependent cigarette smokers as their heirs or survivors.

Id. at 560-61. The plaintiffs limit the claims to years since 1943.^[1]

This matter comes before us on interlocutory appeal, under 28 U.S.C. § 1292(b), of the class certification order. Concluding that the district court abused its discretion in certifying the class, we reverse.

I.

A. The Class Complaint

The plaintiffs^[2] filed this class complaint against the defendant tobacco companies^[3] and the Tobacco Institute, Inc., seeking compensation solely for the injury of nicotine addiction. The gravamen of their complaint is the novel and wholly untested theory that the defendants fraudulently failed to inform consumers that nicotine is addictive and manipulated the level of nicotine in cigarettes to sustain their addictive nature. The class complaint alleges nine causes of action: fraud and deceit, negligent misrepresentation, intentional infliction of emotional distress, negligence and negligent infliction of emotional distress, violation of state consumer protection statutes, breach of express warranty, breach of implied warranty, strict product liability, and redhibition pursuant to the Louisiana Civil Code.

The plaintiffs seek compensatory^[4] and punitive damages^[5] and attorneys' fees.^[6] In [738] addition, the plaintiffs seek equitable relief for fraud and deceit, negligent misrepresentation, violation of consumer protection statutes, and breach of express and implied warranty. The equitable remedies include a declaration that defendants are financially responsible for notifying all class members of nicotine's addictive nature, a declaration that the defendants manipulated nicotine levels with the intent to sustain the addiction of plaintiffs and the class members, an order that the defendants disgorge any profits made from the sale of cigarettes, restitution for sums paid for cigarettes, and the establishment of a medical monitoring fund.

The plaintiffs initially defined the class as "all nicotine dependent persons in the United States," including current, former and deceased smokers since 1943. Plaintiffs conceded that addiction would have to be proven by each class member; the defendants argued that proving class membership will require individual mini-trials to determine whether addiction actually exists.

In response to the district court's inquiry, the plaintiffs proposed a four-phase trial plan.^[7] In phase 1, a jury would determine common issues of "core liability." Phase 1 issues would include^[8] (1) issues of law and fact relating to defendants' course of conduct, fraud, and negligence liability (including duty, standard of care, misrepresentation and concealment, knowledge, intent); (2) issues of law and fact relating to defendants' alleged conspiracy and concert of action; (3) issues of fact relating to the addictive nature/dependency creating characteristics and properties of nicotine; (4) issues of fact relating to nicotine cigarettes as defective products; (5) issues of fact relating to whether defendants' wrongful conduct was intentional, reckless or negligent; (6) identifying which defendants specifically targeted their advertising and promotional efforts to particular groups (e.g. youths, minorities, etc.); (7) availability of a presumption of reliance; (8) whether defendants' misrepresentations/suppression of fact and/or of addictive properties of nicotine preclude availability of a "personal choice" defense; (9) defendants' liability for actual damages, and the categories of such damages; (10) defendants' liability for emotional distress damages; and (11) defendants' liability for punitive damages.

Phase 1 would be followed by notice of the trial verdict and claim forms to class members. In phase 2, the jury would determine compensatory damages in sample plaintiff cases. The jury then would establish a ratio of punitive damages to compensatory damages, which ratio thereafter would apply to each class member.

Phase 3 would entail a complicated procedure to determine compensatory damages for individual class members. The trial plan envisions determination of absent class members' compensatory economic and emotional distress damages on the basis of claim forms, "subject to verification techniques and assertion of defendants' affirmative defenses under grouping, sampling, or representative procedures to be determined by the Court."

The trial plan left open how jury trials on class members' personal injury/wrongful death claims would be handled, but the trial plan discussed the possibility of bifurcation. In phase 4, the court would apply the punitive damage ratio based on individual damage awards and would conduct a review of the reasonableness of the award.

B. The Class Certification Order

Following extensive briefing, the district court granted, in part, plaintiffs' motion for class certification, concluding that the prerequisites of FED.R.CIV.P. 23(a) had been met.^[9] The court rejected certification, under [739] FED.R.CIV.P. 23(b)(2), of the plaintiffs' claim for equitable relief, including the claim for medical monitoring. 160 F.R.D. at 552. Appellees have not cross-appealed that portion of the order.

The court did grant the plaintiffs' motion to certify the class under FED.R.CIV.P. 23(b)(3),^[10] organizing the class action issues into four categories: (1) core liability; (2) injury-in-fact, proximate cause, reliance and affirmative defenses; (3) compensatory damages; and (4) punitive damages. Id. at 553-58. It then analyzed each category to determine whether it met the predominance and superiority requirements of rule 23(b)(3). Using its power to sever issues for certification under FED.R.CIV.P. 23(c)(4), the court certified the class on core liability and punitive damages, and certified the class conditionally pursuant to FED.R.CIV.P. 23(c)(1).

1. Core Liability Issues

The court defined core liability issues as "common factual issues [of] whether defendants knew cigarette smoking was addictive, failed to inform cigarette smokers of such, and took actions to addict cigarette smokers. Common legal issues include fraud, negligence, breach of warranty (express or implied), strict liability, and violation of consumer protection statutes." 160 F.R.D. at 553.

The court found that the predominance requirement of rule 23(b)(3) was satisfied for the core liability issues. Without any specific analysis regarding the multitude of issues that make up "core liability," the court found that under Jenkins v. Raymark Indus., 782 F.2d 468 (5th Cir.1986), common issues predominate because resolution of core liability issues would significantly advance the individual cases. The court did not discuss why "core liability" issues would be a significant, rather than just common, part of each individual trial, nor why the individual issues in the remaining categories did not predominate over the common "core liability" issues.

The only specific analysis on predominance analysis was on the plaintiffs' fraud claim. The court determined that it would be premature to hold that individual reliance issues predominate over common issues. Relying on Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 94 S.Ct. 2140, 40 L.Ed.2d 732 (1974), the court stated that it could not inquire into the merits of the plaintiffs' claim to determine whether reliance would be an issue in individual trials. 160 F.R.D. at 554. Moreover, the court recognized the possibility that under state law, reliance can be inferred when a fraud claim is based on an omission. Accordingly, the court was convinced that it could certify the class and defer the consideration of how reliance would affect predominance.

The court also deferred substantial consideration of how variations in state law would affect predominance. Relying on two district court opinions,^[11] the court concluded that issues of fraud, breach of warranty, negligence, intentional tort, and strict liability do not vary so much from state to state as to cause individual issues to predominate. The court noted that any determination of how state law variations affect predominance was premature, as the court had yet to make a choice of law determination. As for the consumer protection claims, the court also deferred analysis of state law variations, because "there has been no showing that the [740] consumer protection statutes differ so much as to make individual issues predominate." Id.

The court also concluded that a class action is superior to other methods for adjudication of the core liability issues. Relying heavily on Jenkins, the court noted that having this common issue litigated in a class action was superior to repeated trials of the same evidence. Recognizing serious problems with manageability, it determined that such problems were outweighed by "the specter of thousands, if not millions, of similar trials of liability proceeding in thousands of courtrooms around the nation." Id. at 555-56.

2. Injury-in-fact, Proximate Cause, Reliance, Affirmative Defenses, and Compensatory Damages

Using the same methodology as it did for the core liability issues, the district court refused to certify the issues of injury-in-fact, proximate cause, reliance, affirmative defenses, and compensatory damages, concluding that the "issues are so overwhelmingly replete with individual circumstances that they quickly outweigh predominance and superiority." Id. at 556. Specifically, the court found that whether a person suffered emotional injury from addiction, whether his addiction was caused by the defendants' actions, whether he relied on the defendants' misrepresentations, and whether affirmative defenses unique to each class member precluded recovery were all individual issues. As to compensatory damages and the claim for medical monitoring, the court concluded that such claims were so intertwined with proximate cause and affirmative defenses that class certification would not materially advance the individual cases.

3. Punitive Damages

In certifying punitive damages for class treatment, the court adopted the plaintiffs' trial plan for punitive damages: The class jury would develop a ratio of punitive damages to actual damages, and the court would apply that ratio in individual cases. As it did with the core liability issues, the court determined that variations in state law, including differing burdens of proof, did not preclude certification. Rather than conduct an independent review of predominance or superiority, the court relied on Jenkins and on Watson v. Shell Oil Co., 979 F.2d 1014 (5th Cir.1992), vacated for rehearing en banc, 990 F.2d 805 (5th Cir.1993), appeal dismissed, 53 F.3d 663 (5th Cir.1994), for support of its certification order.^[12]

II.

A district court must conduct a rigorous analysis of the rule 23 prerequisites before certifying a class. General Tel. Co. v. Falcon, 457 U.S. 147, 161, 102 S.Ct. 2364, 2372, 72 L.Ed.2d 740 (1982); Applewhite v. Reichhold Chems., 67 F.3d 571, 573 (5th Cir. 1995). The decision to certify is within the broad discretion of the court, but that discretion must be exercised within the framework of rule 23. Gulf Oil Co. v. Bernard, 452 U.S. 89, 100, 101 S.Ct. 2193, 2200, 68 L.Ed.2d 693 (1981). The party seeking certification bears the burden of proof. Horton v. Goose Creek Ind. Sch. Dist., 690 F.2d 470, 486 (5th Cir. 1982), cert. denied, 463 U.S. 1207, 103 S.Ct. 3536, 77 L.Ed.2d 1387 (1983); In re American Medical Sys., 75 F.3d 1069, 1086 (6th Cir.1996) (concluding that district court reversed the proper burden of proof by asking defendants to show cause why the court should not certify the class).

The district court erred in its analysis in two distinct ways. First, it failed to consider how variations in state law affect predominance and superiority. Second, its predominance inquiry did not include consideration of how a trial on the merits would be conducted.

Each of these defects mandates reversal. Moreover, at this time, while the tort is immature, the class complaint must be dismissed, [741] as class certification cannot be found to be a superior method of adjudication.^[13]

A. Variations in State Law

Although rule 23(c)(1) requires that a class should be certified "as soon as practicable" and allows a court to certify a conditional class, it does not follow that the rule's requirements are lessened when the class is conditional. As a sister circuit explained:

Conditional certification is not a means whereby the District Court can avoid deciding whether, at that time, the requirements of the Rule have been substantially met. The purpose of conditional certification is to preserve the Court's power to revoke certification in those cases wherein the magnitude or complexity of the litigation may eventually reveal problems not theretofore apparent. But in this case the District Court seemed to brush aside one of the requirements of Rule 23(b)(3) by stating that at this time "analysis of the individual versus common questions would be for the Court to act as a seer." However difficult it may have been for the District Court to decide whether common questions predominate over individual questions, it should not have sidestepped this preliminary requirement of the Rule by merely stating that the problem of individual questions "lies far beyond the horizon in the realm of speculation."

In re Hotel Tel. Charges, 500 F.2d 86, 90 (9th Cir.1974).

In a multi-state class action, variations in state law may swamp any common issues and defeat predominance. See Georgine v. Amchem Prods., 83 F.3d 610, 618 (3d Cir.1996) (decertifying class because legal and factual differences in the plaintiffs' claims "when exponentially magnified by choice of law considerations, eclipse any common issues in this case"); American Medical Sys., 75 F.3d at 1085 (granting mandamus in a multi-state products liability action, in part because "[t]he district court ... failed to consider how the law of negligence differs from jurisdiction to jurisdiction").

Accordingly, a district court must consider how variations in state law affect predominance and superiority. Walsh v. Ford Motor Co., 807 F.2d 1000 (D.C.Cir.1986) (Ruth Bader Ginsburg, J.), cert. denied, 482 U.S. 915, 107 S.Ct. 3188, 96 L.Ed.2d 677 (1987). The Walsh court rejected the notion that a district court may defer considering variations in state law:

Appellees see the "which law" matter as academic. They say no variations in state warranty laws relevant to this case exist. A court cannot accept such an assertion "on faith." Appellees, as class action proponents, must show that it is accurate. We have made no inquiry of our own on this score and, for the current purpose, simply note the general unstartling statement made in a leading treatise: "The Uniform Commercial Code is not uniform."

Id. at 1016-17 (footnotes omitted).

A district court's duty to determine whether the plaintiff has borne its burden on class certification requires that a court consider variations in state law when a class action involves multiple jurisdictions. "In order to make the findings required to certify a class action under Rule 23(b)(3) ... one must initially identify the substantive law issues which will control the outcome of the litigation." Alabama v. Blue Bird Body Co., 573 F.2d 309, 316 (5th Cir.1978).

A requirement that a court know which law will apply before making a predominance determination is especially important when there may be differences in state law. See In re Rhone-Poulenc Rorer, Inc. ("Rhone-Poulenc"), 51 F.3d 1293, 1299-1302 (7th Cir.) (mandamus) (comparing differing state pattern instructions on negligence and differing formulations of the meaning of negligence), cert. denied, ___ U.S. ___, 116 S.Ct. 184, 133 L.Ed.2d 122 (1995); In re [742] "Agent Orange" Prod. Liability Litig., 818 F.2d 145, 165 (2d Cir.1987) (noting possibility of differences in state products liability law), cert. denied, 484 U.S. 1004, 108 S.Ct. 695, 98 L.Ed.2d 647 (1988). Given the plaintiffs' burden, a court cannot rely on assurances of counsel that any problems with predominance or superiority can be overcome. Windham v. American Brands, Inc., 565 F.2d 59, 70 (4th Cir.1977), cert. denied, 435 U.S. 968, 98 S.Ct. 1605, 56 L.Ed.2d 58 (1978).

The able opinion in School Asbestos demonstrates what is required from a district court when variations in state law exist. There, the court affirmed class certification, despite variations in state law, because:

To meet the problem of diversity in applicable state law, class plaintiffs have undertaken an extensive analysis of the variances in products liability among the jurisdictions. That review separates the law into four categories. Even assuming additional permutations and combinations, plaintiffs have made a creditable showing, which apparently satisfied the district court, that class certification does not present insuperable obstacles. Although we have some doubt on this score, the effort may nonetheless prove successful.

789 F.2d at 1010; see also Georgine, 83 F.3d at 627 & n. 13 (distinguishing School Asbestos because it involved few individualized questions, and class counsel had made a credible argument that the applicable law of the different states could be categorized into four patterns); Walsh, 807 F.2d at 1017 (holding that "nationwide class action movants must creditably demonstrate, through an `extensive analysis' of state law variances, `that class certification does not present insuperable obstacles'").

A thorough review of the record demonstrates that, in this case, the district court did not properly consider how variations in state law affect predominance. The court acknowledged as much in its order granting class certification, for, in declining to make a choice of law determination, it noted that "[t]he parties have only briefly addressed the conflict of laws issue in this matter." 160 F.R.D. at 554. Similarly, the court stated that "there has been no showing that the consumer protection statutes differ so much as to make individual issues predominate." Id.^[14]

The district court's review of state law variances can hardly be considered extensive; it conducted a cursory review of state law variations and gave short shrift to the defendants' arguments concerning variations. In response to the defendants' extensive analysis of how state law varied on fraud, products liability, affirmative defenses, negligent infliction of emotional distress, consumer protection statutes, and punitive damages,^[15] the court examined a sample phase 1 [743] jury interrogatory and verdict form, a survey of medical monitoring decisions, a survey of consumer fraud class actions, and a survey of punitive damages law in the defendants' home states. The court also relied on two district court opinions granting certification in multi-state class actions.

The district court's consideration of state law variations was inadequate. The surveys provided by the plaintiffs failed to discuss, in any meaningful way, how the court could deal with variations in state law. The consumer fraud survey simply quoted a few state courts that had certified state class actions. The survey of punitive damages was limited to the defendants' home states. Moreover, the two district court opinions on which the court relied did not support the proposition that variations in state law could be ignored.^[16] Nothing in the record demonstrates that the court critically analyzed how variations in state law would affect predominance.

The court also failed to perform its duty to determine whether the class action would be manageable in light of state law variations. The court's only discussion of manageability [744] is a citation to Jenkins and the claim that "[w]hile manageability of the liability issues in this case may well prove to be difficult, the Court finds that any such difficulties pale in comparison to the specter of thousands, if not millions, of similar trials of liability proceeding in thousands of courtrooms around the nation." Id. at 555-56.

The problem with this approach is that it substitutes case-specific analysis with a generalized reference to Jenkins. The Jenkins court, however, was not faced with managing a novel claim involving eight causes of action, multiple jurisdictions, millions of plaintiffs, eight defendants, and over fifty years of alleged wrongful conduct. Instead, Jenkins involved only 893 personal injury asbestos cases, the law of only one state, and the prospect of trial occurring in only one district. Accordingly, for purposes of the instant case, Jenkins is largely inapposite.

In summary, whether the specter of millions of cases outweighs any manageability problems in this class is uncertain when the scope of any manageability problems is unknown. Absent considered judgment on the manageability of the class, a comparison to millions of individual trials is meaningless.

B. Predominance

The district court's second error was that it failed to consider how the plaintiffs' addiction claims would be tried, individually or on a class basis. See 160 F.R.D. at 554. The district court, based on Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 177-78, 94 S.Ct. 2140, 2152-53, 40 L.Ed.2d 732 (1974), and Miller v. Mackey Int'l, 452 F.2d 424 (5th Cir.1971), believed that it could not go past the pleadings for the certification decision. The result was an incomplete and inadequate predominance inquiry.

The crux of the court's error was that it misinterpreted Eisen and Miller. Neither case suggests that a court is limited to the pleadings when deciding on certification. Both, instead, stand for the unremarkable proposition that the strength of a plaintiff's claim should not affect the certification decision. In Eisen, the Court held that it was improper to make a preliminary inquiry into the merits of a case, determine that the plaintiff was likely to succeed, and consequently shift the cost of providing notice to the defendant. 417 U.S. at 177, 94 S.Ct. at 2152. In Miller, this court held that a district court could not deny certification based on its belief that the plaintiff could not prevail on the merits. 452 F.2d at 427.

A district court certainly may look past the pleadings to determine whether the requirements of rule 23 have been met.^[17] Going beyond the pleadings is necessary, as a court must understand the claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful determination of the certification issues. See MANUAL FOR COMPLEX LITIGATION § 30.11 (3d ed. 1995).

The district court's predominance inquiry demonstrates why such an understanding is necessary. The premise of the court's opinion is a citation to Jenkins and a conclusion that class treatment of common issues would significantly advance the individual trials. [745] Absent knowledge of how addiction-as-injury cases would actually be tried, however, it was impossible for the court to know whether the common issues would be a "significant" portion of the individual trials. The court just assumed that because the common issues would play a part in every trial, they must be significant.^[18] The court's synthesis of Jenkins and Eisen would write the predominance requirement out of the rule, and any common issue would predominate if it were common to all the individual trials.^[19]

The court's treatment of the fraud claim also demonstrates the error inherent in its approach.^[20] According to both the advisory committee's notes to Rule 23(b)(3) and this court's decision in Simon v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 482 F.2d 880 (5th Cir.1973), a fraud class action cannot be certified when individual reliance will be an issue. The district court avoided the reach of this court's decision in Simon by an erroneous reading of Eisen; the court refused to consider whether reliance would be an issue in individual trials.

The problem with the district court's approach is that after the class trial, it might have decided that reliance must be proven in individual trials. The court then would have been faced with the difficult choice of decertifying the class after phase 1 and wasting judicial resources, or continuing with a class action that would have failed the predominance requirement of rule 23(b)(3).^[21]

[746] III.

In addition to the reasons given above, regarding the district court's procedural errors, this class must be decertified because it independently fails the superiority requirement of rule 23(b)(3). In the context of mass tort class actions, certification dramatically affects the stakes for defendants. Class certification magnifies and strengthens the number of unmeritorious claims. Agent Orange, 818 F.2d at 165-66. Aggregation of claims also makes it more likely that a defendant will be found liable and results in significantly higher damage awards. MANUAL FOR COMPLEX LITIGATION § 33.26 n. 1056; Kenneth S. Bordens and Irwin A. Horowitz, Mass Tort Civil Litigation: The Impact of Procedural Changes on Jury Decisions, 73 JUDICATURE 22 (1989).

In addition to skewing trial outcomes, class certification creates insurmountable pressure on defendants to settle, whereas individual trials would not. See Peter H. Schuck, Mass Torts: An Institutional Evolutionist Perspective, 80 CORNELL L.REV. 941, 958 (1995). The risk of facing an all-or-nothing verdict presents too high a risk, even when the probability of an adverse judgment is low. Rhone-Poulenc, 51 F.3d at 1298. These settlements have been referred to as judicial blackmail.^[22]

It is no surprise then, that historically, certification of mass tort litigation classes has been disfavored.^[23] The traditional concern [747] over the rights of defendants in mass tort class actions is magnified in the instant case. Our specific concern is that a mass tort cannot be properly certified without a prior track record of trials from which the district court can draw the information necessary to make the predominance and superiority analysis required by rule 23. This is because certification of an immature tort results in a higher than normal risk that the class action may not be superior to individual adjudication.

We first address the district court's superiority analysis. The court acknowledged the extensive manageability problems with this class. Such problems include difficult choice of law determinations, subclassing of eight claims with variations in state law, Erie guesses, notice to millions of class members, further subclassing to take account of transient plaintiffs, and the difficult procedure for determining who is nicotine-dependent. Cases with far fewer manageability problems have given courts pause. See, e.g., Georgine, 83 F.3d at 632; In re Hotel Tel., 500 F.2d at 90.

The district court's rationale for certification in spite of such problems — i.e., that a class trial would preserve judicial resources in the millions of inevitable individual trials — is based on pure speculation. Not every mass tort is asbestos, and not every mass tort will result in the same judicial crises.^[24] The judicial crisis to which the district court referred is only theoretical.

What the district court failed to consider, and what no court can determine at this time, is the very real possibility that the judicial crisis may fail to materialize.^[25] The plaintiffs' [748] claims are based on a new theory of liability and the existence of new evidence. Until plaintiffs decide to file individual claims, a court cannot, from the existence of injury, presume that all or even any plaintiffs will pursue legal remedies.^[26] Nor can a court make a superiority determination based on such speculation. American Medical Sys., 75 F.3d at 1085 (opining that superiority is lacking where judicial management crisis does not exist and individual trials are possible).

Severe manageability problems and the lack of a judicial crisis are not the only reasons why superiority is lacking. The most compelling rationale for finding superiority in a class action — the existence of a negative value suit — is missing in this case. Accord Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 809, 105 S.Ct. 2965, 2973, 86 L.Ed.2d 628 (1985); Rhone-Poulenc, 51 F.3d at 1299.

As he stated in the record, plaintiffs' counsel in this case has promised to inundate the courts with individual claims if class certification is denied. Independently of the reliability of this self-serving promise, there is reason to believe that individual suits are feasible. First, individual damage claims are high, and punitive damages are available in most states. The expense of litigation does not necessarily turn this case into a negative value suit, in part because the prevailing party may recover attorneys' fees under many consumer protection statutes. See Boggs v. Alto Trailer Sales, 511 F.2d 114, 118 (5th Cir.1975) (acknowledging that the availability of attorneys' fees is a common basis for finding non-superiority).

In a case such as this one, where each plaintiff may receive a large award, and fee shifting often is available, we find Chief Judge Posner's analysis of superiority to be persuasive:

For this consensus or maturing of judgment the district judge proposes to substitute a single trial before a single jury.... One jury ... will hold the fate of an industry in the palm of its hand.... That kind of thing can happen in our system of civil justice.... But it need not be tolerated when the alternative exists of submitting an issue to multiple juries constituting in the aggregate a much larger and more diverse sample of decision-makers. That would not be a feasible option if the stakes to each class member were too slight to repay the cost of suit.... But this is not the case.... Each plaintiff if successful is apt to receive a judgment in the millions. With the aggregate stakes in the tens or hundreds of millions of dollars, or even in the billions, it is not a waste of judicial resources to conduct more than one trial, before more than six jurors, to determine whether a major segment of the international pharmaceutical industry is to follow the asbestos manufacturers into Chapter 11.

Rhone-Poulenc, 51 F.3d at 1300. So too here, we cannot say that it would be a waste to allow individual trials to proceed, before a district court engages in the complicated predominance and superiority analysis necessary to certify a class.

Fairness may demand that mass torts with few prior verdicts or judgments be litigated first in smaller units — even single-plaintiff, single-defendant trials — until general causation, typical injuries, and levels of damages become established. Thus, "mature" mass torts like asbestos or Dalkon Shield may call for procedures that are not appropriate for incipient mass tort cases, such as those involving injuries arising [749] from new products, chemical substances, or pharmaceuticals.

MANUAL FOR COMPLEX LITIGATION § 33.26.

The remaining rationale for superiority — judicial efficiency^[27] — is also lacking. In the context of an immature tort, any savings in judicial resources is speculative, and any imagined savings would be overwhelmed by the procedural problems that certification of a sui generis cause of action brings with it.

Even assuming arguendo that the tort system will see many more addiction-as-injury claims, a conclusion that certification will save judicial resources is premature at this stage of the litigation. Take for example the district court's plan to divide core liability from other issues such as comparative negligence and reliance. The assumption is that after a class verdict, the common issues will not be a part of follow-up trials. The court has no basis for that assumption.

It may be that comparative negligence will be raised in the individual trials, and the evidence presented at the class trial will have to be repeated. The same may be true for reliance.^[28] The net result may be a waste, not a savings, in judicial resources. Only after the courts have more experience with this type of case can a court certify issues in a way that preserves judicial resources. See Jenkins, 782 F.2d 468 (certifying state of the art defense because experience had demonstrated that judicial resources could be saved by certification).

Even assuming that certification at this time would result in judicial efficiencies in individual trials, certification of an immature tort brings with it unique problems that may consume more judicial resources than certification will save. These problems are not speculative; the district court faced, and ignored, many of the problems that immature torts can cause.

The primary procedural difficulty created by immature torts is the inherent difficulty a district court will have in determining whether the requirements of rule 23 have been met. We have already identified a number of defects with the district court's predominance and manageability inquires, defects that will continue to exist on remand because of the unique nature of the plaintiffs' claim.

The district court's predominance inquiry, or lack of it, squarely presents the problems associated with certification of immature torts. Determining whether the common issues are a "significant" part of each individual case has an abstract quality to it when no court in this country has ever tried an injury-as-addiction claim. As the plaintiffs admitted to the district court, "we don't have the learning curb [sic] that is necessary to say to Your Honor `this is precisely how this case can be tried and that will not run afoul of the teachings of the 5th Circuit.'"

Yet, an accurate finding on predominance is necessary before the court can certify a class. It may turn out that the defendant's conduct, while common, is a minor part of each trial. Premature certification deprives the defendant of the opportunity to present that argument to any court and risks decertification after considerable resources have been expended.

The court's analysis of reliance also demonstrates the potential judicial inefficiencies in immature tort class actions. Individual trials will determine whether individual reliance will be an issue. Rather than guess that reliance may be inferred, a district court should base its determination that individual reliance does not predominate on the wisdom of such individual trials. The risk that a district court will make the wrong guess, that the parties will engage in years of litigation, and that the class ultimately will be decertified (because reliance predominates over common issues) prevents this class action from being a superior method of adjudication.

The complexity of the choice of law inquiry also makes individual adjudication superior [750] to class treatment. The plaintiffs have asserted eight theories of liability from every state. Prior to certification, the district court must determine whether variations in state law defeat predominance. While the task may not be impossible, its complexity certainly makes individual trials a more attractive alternative and, ipso facto, renders class treatment not superior. See Georgine, 83 F.3d at 634 (recommending that Congress solve the problems inherent in multi-state class actions by federalizing choice of law rules, but rejecting such legislation when it masquerades as judicial innovation).

Through individual adjudication, the plaintiffs can winnow their claims to the strongest causes of action.^[29] The result will be an easier choice of law inquiry and a less complicated predominance inquiry. State courts can address the more novel of the plaintiffs' claims, making the federal court's Erie guesses less complicated. It is far more desirable to allow state courts to apply and develop their own law than to have a federal court apply "a kind of Esperanto [jury] instruction." Rhone-Poulenc, 51 F.3d at 1300; MANUAL FOR COMPLEX LITIGATION § 33.26 (discussing the full cycle of litigation necessary for a tort to mature).

The full development of trials in every state will make subclassing an easier process. The result of allowing individual trials to proceed is a more accurate determination of predominance. We have already seen the result of certifying this class without individual adjudications, and we are not alone in expressing discomfort with a district court's certification of a novel theory. See Rhone-Poulenc, 51 F.3d at 1300.

Another factor weighing heavily in favor of individual trials is the risk that in order to make this class action manageable, the court will be forced to bifurcate issues in violation of the Seventh Amendment. This class action is permeated with individual issues, such as proximate causation, comparative negligence, reliance, and compensatory damages. In order to manage so many individual issues, the district court proposed to empanel a class jury to adjudicate common issues. A second jury, or a number of "second" juries, will pass on the individual issues, either on a case-by-case basis or through group trials of individual plaintiffs.

The Seventh Amendment entitles parties to have fact issues decided by one jury, and prohibits a second jury from reexamining those facts and issues.^[30] Thus, Constitution allows bifurcation of issues that are so separable that the second jury will not be called upon to reconsider findings of fact by the first:

[T]his Court has cautioned that separation of issues is not the usual course that should be followed, and that the issue to be tried must be so distinct and separable from the others that a trial of it alone may be had without injustice. This limitation on the use of bifurcation is a recognition of the fact that inherent in the Seventh Amendment guarantee of a trial by jury is the general right of a litigant to have only one jury pass on a common issue of fact. The Supreme Court recognized this principle in Gasoline Products [Co., Inc. v. Champlin Refining Co., 283 U.S. 494, 51 S.Ct. 513, 75 L.Ed. 1188 (1931)].... The Court explained ... that a partial new trial may not be "properly resorted to unless it clearly appears that the issue to be retried is so distinct and separable from the others that a trial of it alone may be had without injustice." Such a rule is dictated for the very practical reason that if separate juries are allowed to pass on issues involving overlapping legal and factual questions the [751] verdicts rendered by each jury could be inconsistent.

Alabama v. Blue Bird Body Co., 573 F.2d 309, 318 (5th Cir.1978) (citations and footnotes omitted).

The Seventh Circuit recently addressed Seventh Amendment limitations to bifurcation. In Rhone-Poulenc, 51 F.3d at 1302-03, Chief Judge Posner described the constitutional limitation as one requiring a court to "carve at the joint" in such a way so that the same issue is not reexamined by different juries. "The right to a jury trial ... is a right to have juriable issues determined by the first jury impaneled to hear them (provided there are no errors warranting a new trial), and not reexamined by another finder of fact." Id. at 1303.

Severing a defendant's conduct from comparative negligence results in the type of risk that our court forbade in Blue Bird. Comparative negligence, by definition, requires a comparison between the defendant's and the plaintiff's conduct. Rhone-Poulenc, 51 F.3d at 1303 ("Comparative negligence entails, as the name implies, a comparison of the degree of negligence of plaintiff and defendant."). At a bare minimum, a second jury will rehear evidence of the defendant's conduct. There is a risk that in apportioning fault, the second jury could reevaluate the defendant's fault, determine that the defendant was not at fault, and apportion 100% of the fault to the plaintiff. In such a situation, the second jury would be impermissibly reconsidering the findings of a first jury. The risk of such reevaluation is so great that class treatment can hardly be said to be superior to individual adjudication.^[31]

The plaintiffs' final retort is that individual trials are inadequate because time is running out for many of the plaintiffs.^[32] They point out that prior litigation against the tobacco companies has taken up to ten years to wind through the legal system. While a compelling rhetorical argument, it is ultimately inconsistent with the plaintiffs' own arguments and ignores the realities of the legal system. First, the plaintiffs' reliance on prior personal injury cases is unpersuasive, as they admit that they have new evidence and are pursuing a claim entirely different from that of past plaintiffs.

Second, the plaintiffs' claim that time is running out ignores the reality of the class action device. In a complicated case involving multiple jurisdictions, the conflict of law question itself could take decades to work its way through the courts.^[33] Once that issue has been resolved, discovery, subclassing, and ultimately the class trial would take place. Next would come the appellate process. After the class trial, the individual trials and appeals on comparative negligence and damages would have to take place. The net result could be that the class action device would lengthen, not shorten, the time it takes for the plaintiffs to reach final judgment.

[752] IV.

The district court abused its discretion by ignoring variations in state law and how a trial on the alleged causes of action would be tried. Those errors cannot be corrected on remand because of the novelty of the plaintiffs' claims. Accordingly, class treatment is not superior to individual adjudication.

We have once before stated that "traditional ways of proceeding reflect far more than habit. They reflect the very culture of the jury trial...." In re Fibreboard Corp., 893 F.2d 706, 711 (5th Cir.1990). The collective wisdom of individual juries is necessary before this court commits the fate of an entire industry or, indeed, the fate of a class of millions, to a single jury. For the forgoing reasons, we REVERSE and REMAND with instructions that the district court dismiss the class complaint.

[1] The court defined "nicotine-dependent" as:

(a) All cigarette smokers who have been diagnosed by a medical practitioner as nicotine-dependent; and/or

(b) All regular cigarette smokers who were or have been advised by a medical practitioner that smoking has had or will have adverse health consequences who thereafter do not or have not quit smoking.

Id. at 561. The definition is based upon the criteria for "dependence" set forth in AMERICAN PSYCHIATRIC ASSOCIATION, DIAGNOSTIC AND STATISTICAL MANUAL OF MENTAL DISORDERS (4th ed.).

[2] The original class plaintiffs were Ernest R. Perry, Sr., T. George Solomon, Jr., and Dianne A. Castano. The class representatives include Perry, Gloria Scott, and Deania Jackson, all current cigarette smokers. Dianne Castano is a class representative on behalf of her deceased husband, Peter Castano.

[3] The defendant tobacco companies are The American Tobacco Company, Inc., R.J. Reynolds Tobacco Company, Brown & Williamson Tobacco Corporation, Phillip Morris, Inc., Liggett & Meyers, Inc., Lorillard Tobacco Company, Inc., and United States Tobacco Company. Prior to oral argument, Liggett & Meyers, Inc., filed in this court a motion conditionally to dismiss, without prejudice, its appeal because of a pending settlement with the plaintiffs. We have declined to enter the requested dismissal.

[4] The plaintiffs seek compensatory damages for fraud and deceit, negligent misrepresentation, intentional infliction of emotional distress, breach of express and implied warranty, strict products liability, and redhibition.

[5] The plaintiffs seek punitive damages for fraud and deceit, intentional infliction of emotional distress, negligence, and negligent infliction of emotional distress.

[6] The plaintiffs seek attorneys' fees for violations of consumer protection statutes and redhibition.

[7] The district court did not adopt the plaintiffs' trial plan, but its order certifying the class incorporates many elements of it.

[8] For purposes of clarity, those issues that the district court did not certify as common have been left out of this summary of the plaintiffs' trial plan.

[9] Rule 23(a) states:

One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.

[10] Rule 23(b)(3) states, in pertinent part, that a class action may be maintained if

the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

[11] The court cited In re Asbestos Sch. Litig., 104 F.R.D. 422, 434 (E.D.Pa.1984) (discussing the similarity of negligence and strict liability in U.S. jurisdictions), aff'd in part and reversed in part sub nom. School Dist. of Lancaster v. Lake Asbestos of Quebec, Ltd. (In re Sch. Asbestos Litig.) ("School Asbestos"), 789 F.2d 996, 1010 (3d Cir.), cert. denied, 479 U.S. 852, 107 S.Ct. 182, 93 L.Ed.2d 117, and cert. denied, 479 U.S. 915, 107 S.Ct. 318, 93 L.Ed.2d 291 (1986), and In re Cordis Cardiac Pacemaker Prod. Liability Litig., No. C-3-90-374 (S.D.Ohio Dec. 23, 1992) (unpublished) (discussing similarities among negligence, strict liability, and fraud).

[12] The panel opinion in Watson has no precedential weight in this circuit. While the case was awaiting rehearing en banc, it settled. According to the Internal Operating Procedure accompanying 5TH CIR.R. 35, "the effect of granting a rehearing en banc is to vacate the previous opinion and judgment of the Court and to stay the mandate." See de Aguilar v. Boeing Co., 47 F.3d 1404, 1411 (5th Cir.), cert. denied, ___ U.S. ___, 116 S.Ct. 180, 133 L.Ed.2d 119 (1995).

[13] The defendants raise a number of additional challenges to the district court's order, including claims that individual issues predominate, that the use of a punitive damage ratio violates due process, that a multi-state class action inevitably will violate Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and that bifurcation of core liability issues in a class action violates article III of the Constitution. Given our conclusion that this matter cannot proceed as a class action in any event, we find it unnecessary to address those issues.

[14] The defendants contend that this statement shows that the court erroneously placed the burden on them to show that the various state statutes differ, rather than on the plaintiffs to show that they do not. See American Medical Systems, 75 F.3d at 1085.

[15] We find it difficult to fathom how common issues could predominate in this case when variations in state law are thoroughly considered. The Georginecourt found that common issues in an asbestos class action did not predominate:

However, beyond these broad issues, the class members' claims vary widely in character. Class members were exposed to different asbestos-containing products, for different amounts of time, in different ways, and over different periods. Some class members suffer no physical injury or have only asymptomatic pleural changes, while others suffer from lung cancer, disabling asbestosis, or from mesothelioma — a disease which, despite a latency period of approximately fifteen to forty years, generally kills its victims within two years after they become symptomatic. Each has a different history of cigarette smoking, a factor that complicates the causation inquiry.

. . . . .

These factual differences translate into significant legal differences. Differences in amount of exposure and nexus between exposure and injury lead to disparate applications of legal rules, including matters of causation, comparative fault, and the types of damages available to each plaintiff.

Furthermore, because we must apply an individualized choice of law analysis to each plaintiff's claims, the proliferation of disparate factual and legal issues is compounded exponentially.... In short, the number of uncommon issues in this humongous class action, with perhaps as many as a million class members, is colossal.

83 F.3d at 626 (citations omitted).

The Castano class suffers from many of the difficulties that the Georgine court found dispositive. The class members were exposed to nicotine through different products, for different amounts of time, and over different time periods. Each class member's knowledge about the effects of smoking differs, and each plaintiff began smoking for different reasons. Each of these factual differences impacts the application of legal rules such as causation, reliance, comparative fault, and other affirmative defenses.

Variations in state law magnify the differences. In a fraud claim, some states require justifiable reliance on a misrepresentation, see Allgood v. R.J. Reynolds Tobacco Co., 80 F.3d 168, 171 (5th Cir.1996); Burroughs v. Jackson Nat'l Life Ins. Co., 618 So.2d 1329, 1332 (Ala.1993), while others require reasonable reliance, see Parks v. Morris Homes Corp., 245 S.C. 461, 141 S.E.2d 129, 132 (1965). States impose varying standards to determine when there is a duty to disclose facts. See Sugarhouse Fin. Co. v. Anderson, 610 P.2d 1369, 1373 (Utah 1980) (finding no duty when transaction was made at arm's length); Dodd v. Nelda Stephenson Chevrolet, Inc., 626 So.2d 1288, 1293 (Ala.1993) (using a flexible standard based on the transaction and relationship of the parties).

Products liability law also differs among states. Some states do not recognize strict liability. E.g., Cline v. Prowler Indus., 418 A.2d 968, 979-80 (Del.1980). Some have adopted RESTATEMENT (SECOND) OF TORTS § 402A. E.g., O.S. Stapley Co. v. Miller, 103 Ariz. 556, 447 P.2d 248, 251-52 (1968). Among the states that have adopted the Restatement, there are variations. See 5 STUART M. SPEISER ET AL., THE AMERICAN LAW OF TORTS §§ 18.31, 18:34-18:35 (Law Co-op 1996).

Differences in affirmative defenses also exist. Assumption of risk is a complete defense to a products claim in some states. E.g., S.C.CODE ANN. § 15-73-20 (Law Co-op 1976). In others, it is a part of comparative fault analysis. E.g., COLO.REV.STAT. § 13-21-111.7 (1986). Some states utilize "pure" comparative fault, e.g., ARIZ. REV.STAT.ANN. § 12-2503-09 (1984); others follow a "greater fault bar," e.g., CONN.GEN.STAT.ANN. § 52-572h (West 1988); and still others use an "equal fault bar," e.g., ARK.CODE ANN. § 16-64-122 (Michie 1991).

Negligent infliction of emotional distress also involves wide variations. See Douglas B. Marlow, Negligent Infliction of Mental Distress: A Jurisdictional Survey of Existing Limitation Devices and Proposal Based on an Analysis of Objective Versus Subjective Indices of Distress, 33 VILL. L.REV. 781 (1988). Some states do not recognize the cause of action at all. See Allen v. Walker, 569 So.2d 350, 352 (Ala.1990). Some require a physical impact. See OB-GYN Assocs. v. Littleton, 259 Ga. 663, 386 S.E.2d 146, 148 (1989).

Despite these overwhelming individual issues, common issues might predominate. We are, however, left to speculate. The point of detailing the alleged differences is to demonstrate the inquiry the district court failed to make.

[16] Both the plaintiffs and the district court cite Cordis and School Asbestos for the definitive proposition that state law does not vary enough in negligence, strict liability, or fraud to prevent certification. See Castano,160 F.R.D. at 554. Putting aside the obvious objection that a court must independently analyze the case before it to determine predominance, such reliance is misplaced.

In Cordis, the court specifically recognized that there are differences in the law of strict liability and fraud in different jurisdictions. The court certified the class despite those differences because the differences did not eliminate predominance in that particular case. Such a finding cannot be reflexively applied to the case sub judice.

The same is true of School Asbestos. Like the court in Cordis, the district court there found little variation in state negligence law. The Third Circuit agreed that the variations in strict liability would not make the class unmanageable. 789 F.2d at 1009. See also Georgine, 83 F.3d at 627 & n. 13 (acknowledging that the court in School Asbestos certified the class despite variations in state law, but limiting the reach of the decision to cases where variations can be broken down into a small number of patterns). It is a stretch to characterize these two cases as standing for the proposition that state law does not vary on negligence, strict liability, or fraud.

[17] See Falcon, 457 U.S. at 160, 102 S.Ct. at 2372 ("Sometimes the issues are plain enough from the pleadings ... and sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question."); Coopers & Lybrand v. Livesay, 437 U.S. 463, 469, 98 S.Ct. 2454, 2458, 57 L.Ed.2d 351 (1978) (reasoning that "the class determination generally involves considerations that are `enmeshed in the factual and legal issues comprising the plaintiff's cause of action.'"); id. at 469 n. 12, 98 S.Ct. at 2458 n. 12 ("`Evaluation of many of the questions entering into determination of class action questions is intimately involved with the merits of the claims. The typicality of the representative's claim or defenses ... and the presence of common questions of law or fact are obvious examples. The more complex determinations required in Rule 23(b)(3) class actions entail even greater entanglement with the merits.'"); Love v. Turlington, 733 F.2d 1562, 1564 (11th Cir.1984) ("While it is true that a trial court may not properly reach the merits of a claim when determining whether the class certification is warranted, this principle should not be talismanically invoked to artificially limit a trial court's examination of the factors necessary to a reasoned determination of whether a plaintiff has met her burden of establishing each of the Rule 23 class action requirements."); Huff v. N.D. Cass Co., 485 F.2d 710, 713 (5th Cir.1973) (en banc) ("It is inescapable that in some cases there will be overlap between the demands of [rule] 23(a) and (b) and the question of whether plaintiff can succeed on the merits.").

[18] The district court's approach to predominance stands in stark contrast to the methodology the district court used in Jenkins. There, the district judge had a vast amount of experience with asbestos cases. He certified the state of the art defense because it was the most significant contested issue in each case. Jenkins v. Raymark Industries, Inc., 109 F.R.D. 269, 279 (E.D.Tex. 1985). To the contrary, however, the district court in the instant case did not, and could not, have determined that the common issues would be a significant part of each case. Unlike the judge in Jenkins, the district judge a quo had no experience with this type of case and did not even inquire into how a case would be tried to determine whether the defendants' conduct would be a significant portion of each case.

[19] An incorrect predominance finding also implicates the court's superiority analysis: The greater the number of individual issues, the less likely superiority can be established. American Medical Sys.,75 F.3d at 1084-85 (distinguishing a single disaster mass tort from a more complex mass tort). The relationship between predominance and superiority in mass torts was recognized in the Advisory Committee's note to rule 23(b)(3), which states:

A "mass accident" resulting in injuries to numerous persons is ordinarily not appropriate for a class action because of the likelihood that significant questions, not only of damages but of liability and defenses to liability, would be present, affecting the individuals in different ways. In these circumstances an action conducted nominally as a class action would degenerate in practice into multiple lawsuits separately tried.

FED.R.CIV.P. 23(b)(3) advisory committee's note (citation omitted), reprinted in 39 F.R.D. 69, 103 (1966). See also Georgine, 83 F.3d at 627-28 (relying on the Advisory Committee's note); American Medical Sys., 75 F.3d at 1084-85.

The plaintiffs assert that Professor Charles Allen Wright, a member of the Advisory Committee has now repudiated this passage in the notes. See H. NEWBERG, 3 NEWBERG ON CLASS ACTIONS § 17.06 (3d ed. 1992). Professor Wright's recent statements, made as an advocate in School Asbestos, must be viewed with some caution. As Professor Wright has stated:

I certainly did not intend by that statement to say that a class should be certified in all mass tort cases. I merely wanted to take the sting out of the statement in the Advisory Committee Note, and even that said only that a class action is "ordinarily not appropriate" in mass-tort cases. The class action is a complex device that must be used with discernment. I think for example that Judge Jones in Louisiana would be creating a Frankenstein's monster if he should allow certification of what purports to be a class action on behalf of everyone who has ever been addicted to nicotine.

Letter of Dec. 22, 1994, to N. Reid Neureiter, Williams & Connolly, Washington, D.C.

[20] The court specifically discussed reliance in the context of a fraud claim. Reliance is also an element of breach of warranty claims in some states, see, e.g., Modern Farm Serv., Inc. v. Ben Pearson, Inc., 308 F.2d 18, 23 (5th Cir.1962) (Arkansas); Caruso v. Celsius Insulation Resources, Inc., 101 F.R.D. 530, 536 (M.D.Pa.1984), and an element of consumer protection statutes in others, see, e.g., Louisiana ex rel. Guste v. General Motors Corp., 370 So.2d 477, 489 (La. 1978).

[21] Severing the defendants' conduct from reliance under rule 23(c)(4) does not save the class action. A district court cannot manufacture predominance through the nimble use of subdivision (c)(4). The proper interpretation of the interaction between subdivisions (b)(3) and (c)(4) is that a cause of action, as a whole, must satisfy the predominance requirement of (b)(3) and that (c)(4) is a housekeeping rule that allows courts to sever the common issues for a class trial. See In re N.D.Cal. Dalkon Shield IUD Prods. Liability Litig., 693 F.2d 847, 856 (9th Cir.1982) (balancing severed issues against the remaining individual issues), cert. denied, 459 U.S. 1171, 103 S.Ct. 817, 74 L.Ed.2d 1015 (1983); see also Jenkins, 109 F.R.D. at 278 (comparing state of the art defense to individual questions of exposure and degree of injury in a class action certified only on the common issue of the state of the art defense). Reading rule 23(c)(4) as allowing a court to sever issues until the remaining common issue predominates over the remaining individual issues would eviscerate the predominance requirement of rule 23(b)(3); the result would be automatic certification in every case where there is a common issue, a result that could not have been intended.

[22] In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prods. Liability Litig., 55 F.3d 768, 784-85 (3d Cir.), cert. denied, ___ U.S. ___, 116 S.Ct. 88, 133 L.Ed.2d 45 (1995); Rhone-Poulenc, 51 F.3d at 1299-1300. See also Georgine, 83 F.3d at 625 n. 10 (rejecting the argument that the possibility of settlement should be factored positively in applying rule 23(b)(3)). But see In re A.H. Robins Co., 880 F.2d 709, 740 (4th Cir.1989) (treating the fact that certification may foster settlement as a positive factor when applying rule 23(b)(3)) (dicta), cert. denied, 493 U.S. 959, 110 S.Ct. 377, 107 L.Ed.2d 362 (1989).

[23] At the time rule 23 was drafted, mass tort litigation as we now know it did not exist. Schuck, supra, at 945. The term had been applied to single-event accidents. Id. Even in those cases, the advisory committee cautioned against certification. See supra note 19. As modern mass tort litigation has evolved, courts have been willing to certify simple single disaster mass torts, see Sterling v. Velsicol Chem. Corp., 855 F.2d 1188, 1197 (6th Cir.1988), but have been hesitant to certify more complex mass torts, see Georgine, 83 F.3d at 627-628, 632 (discussing the trend in certification and decertifying an asbestos class action); American Medical Sys., 75 F.3d at 1084-85. See also Rhone-Poulenc, 51 F.3d 1293 (decertifying class); In re Joint E. & S. Dist. Asbestos Litig., 14 F.3d 726 (2d Cir.1993) (vacating limited fund class action); In re Bendectin Prod. Liability Litig., 749 F.2d 300 (6th Cir.1984) (granting mandamus reversing class certification); Dalkon Shield IUD Prods. Liability Litig., 693 F.2d at 856 (decertifying class for lack of commonality and superiority); Harding v. Tambrands Inc., 165 F.R.D. 623, 629 (D.Kan. 1996) (denying certification of nationwide class of persons alleging toxic shock syndrome); Kurczi v. Eli Lilly & Co., 160 F.R.D. 667 (N.D.Ohio 1995) (denying nationwide class certification); Hurd v. Monsanto Co., 164 F.R.D. 234 (S.D.Ind. 1995) (refusing to certify class of persons alleging PCB exposure at one plant); Bethards v. Bard Access Sys., Inc., 1995 WL 75356 (N.D.Ill.1995) (recommending denial of class certification in products liability action regarding catheters); Ikonen v. Hartz Mountain Corp., 122 F.R.D. 258 (S.D.Cal.1988) (denying class certification in flea and tick spray products liability action); In re Tetracycline Cases, 107 F.R.D. 719 (W.D.Mo. 1985) (denying certification because class action is not superior method of adjudication); Mertens v. Abbott Laboratories, 99 F.R.D. 38 (D.N.H.1983) (denying certification of class in DES litigation); Ryan v. Eli Lilly & Co., 84 F.R.D. 230 (D.S.C. 1979) (denying certification of class of women who took synthetic estrogen during pregnancy); Yandle v. PPG Indus., 65 F.R.D. 566 (E.D.Tex. 1974) (denying asbestos claims class certification). But see Central Wesleyan College v. W.R. Grace & Co., 6 F.3d 177 (4th Cir.1993) (affirming certification of class of colleges in suit against asbestos manufacturer); Agent Orange, 818 F.2d at 166-67 (certifying class despite manageability difficulties because of centrality of military contractor defense); School Asbestos, 789 F.2d 996; In re Teletronics Pacing System, Inc., Acufix Atrail "J" Leads Prod. Liability Litig., No. C-1-95-094 (S.D.Ohio, Nov. 17, 1995) (certifying class against manufacturer of alleged defective pacemaker leads) (unpublished); In re Copley Pharmaceutical, Inc., 161 F.R.D. 456 (D.Wyo. 1995) (certifying nationwide class for limited threshold liability issues regarding prescription drug albuterol, but refusing to certify class for individual issues of liability and causation or punitive damages); Craft v. Vanderbilt Univ., No. 3:94-0090 (M.D.Tenn. July 14, 1994) (certifying class for exposure to a radioactive isotope in medical experiments) (unpublished); In re Cordis Cardiac Pacemaker Prod. Liability Litig., No. C-3-90-374 (S.D.Ohio Dec. 23, 1992) (unpublished).

[24] There is reason to believe that even a mass tort like asbestos could be managed, without class certification, in a way that avoids judicial meltdown. See Georgine, 83 F.3d at 634 (suggesting methods, short of a nationwide class action, that would be more efficient than individual trials); John A. Siliciano, Mass Torts and the Rhetoric of Crisis,80 CORNELL L.REV. 980, 1010-12 (1995) (suggesting that stringent "gate keeping" by courts at the outset would have prevented asbestos from becoming a monstrous mass tort). In a case such as this one, where causation is a key element, disaggregation of claims allows courts to dismiss weak and frivolous claims on summary judgment.

Where novel theories of recovery are advanced (such as addiction as injury), courts can aggressively weed out untenable theories. See, e.g., Allgood v. R.J. Reynolds Tobacco Co., 80 F.3d 168, 172 (5th Cir.1996) (rejecting failure-to-warn claim against tobacco companies based on inadequate proof of reliance and, alternatively, on "common knowledge" theory). Courts can use case management techniques to avoid discovery abuses. The parties can also turn to mediation and arbitration to settle individual or aggregated cases.

[25] The plaintiffs, in seemingly inconsistent positions, argue that the lack of a judicial crisis justifies certification; they assert that the reason why individual plaintiffs have not filed claims is that the tobacco industry makes individual trials far too expensive and plaintiffs are rarely successful. The fact that a party continuously loses at trial does not justify class certification, however. See American Medical Systems,75 F.3d at 1087 and n. 20 (granting mandamus in part because judge's comments that class treatment was warranted because the defendant had greater litigation resources than the plaintiff demonstrated a bias in favor of certification by the judge). The plaintiffs' argument, if accepted, would justify class treatment whenever a defendant has better attorneys and resources at its disposal.

The plaintiffs' claim also overstates the defendants' ability to outspend plaintiffs. Assuming arguendo that the defendants pool resources and outspend plaintiffs in individual trials, there is no reason why plaintiffs still cannot prevail. The class is represented by a consortium of well-financed plaintiffs' lawyers who, over time, can develop the expertise and specialized knowledge sufficient to beat the tobacco companies at their own game. See Francis E. McGovern, An Analysis of Mass Torts for Judges, 73 TEX.L.REV. 1821, 1834-35 (1995) (suggesting that plaintiffs can overcome tobacco defendants' perceived advantage when a sufficient number of plaintiffs have filed claims and shared discovery). Courts can also overcome the defendant's alleged advantages through coordination or consolidation of cases for discovery and other pretrial matters. See MANUAL FOR COMPLEX LITIGATION at § 33.21-25.

[26] There are numerous reasons why plaintiffs with positive-value suits opt out of the tort system, including risk aversion to engaging in litigation, privacy concerns, and alternative avenues for medical treatment, such as Medicaid. See McGovern, supra, at 1827-28. In a case where comparative negligence is raised, plaintiffs have the best insight into their own relative fault. Ultimately, a court cannot extrapolate, from the number of potential plaintiffs, the actual number of cases that will be filed. See id. at 1823 & n. 8 (contending that only 10 to 20% of persons who suffer harm actually invoke the tort litigation process).

[27] See Sterling, 855 F.2d at 1196 ("The procedural device of Rule 23(b)(3) class action was designed not solely as a means for assuring legal assistance in the vindication of small claims but, rather, to achieve the economies of time, effort, and expense.").

[28] See, e.g., Allgood, 80 F.3d at 171 (holding that under Texas law, reliance is an essential element of both affirmative fraud and fraudulent concealment).

[29] State courts are more than capable of providing definitive statements regarding the validity of addiction-as-injury claims. See, e.g., Joseph E. Seagram & Sons v. McGuire, 814 S.W.2d 385 (Tex.1991) (accepting "common knowledge" theory and holding no cause of action for alcohol addiction claim based on products liability, misrepresentations, negligence, breach of implied warranties of merchantability and fitness, violations of consumer protection statutes, and conspiracy); see also Allgood, 80 F.3d at 171-72 (rejecting failure-to-warn claim against tobacco companies based on inadequate proof of reliance and, alternatively, on "common knowledge" theory) (citing Joseph E. Seagram).

[30] "[N]o fact tried by jury, shall be otherwise reexamined in any Court of the United States ..." U.S. CONST. amend. VII.

[31] The plaintiffs argue that any risk that a bifurcation order would violate the Seventh Amendment is speculative, as the plaintiffs may prevail on causes of action that either do not require bifurcation or do not contain issues that are so intertwined that the Seventh Amendment will be implicated. In essence, plaintiffs' argument boils down to a repudiation of the class complaint's negligence and strict products liability claims.

[32] This contention is disingenuous at best. At oral argument, the plaintiffs asserted that time is of the essence, because plaintiffs who die cannot partake in a medical monitoring fund. What the plaintiffs failed to mention was that the district court refused to certify a medical monitoring fund, and the plaintiffs have not cross-appealed that decision. Moreover, for the remainder of the claims a plaintiff's family or estate can sue based on survivorship statutes. The plaintiffs' class complaint envisions survivor lawsuits. In fact, the named plaintiff in this case, Dianne Castano, is a non-smoker who is suing both for the wrongful death of her husband and as a representative in a survival action.

[33] The plaintiffs rely on School Asbestos for the proposition that variations in state law do not preclude predominance. Putting that issue aside, the case is instructive for what happened after the Third Circuit remanded to the district court. Almost nine years after the first complaint was filed, and eight years after the court of appeals had affirmed certification, the conflict of law issues had yet to be resolved. See In re Sch. Asbestos Litig., 977 F.2d 764, 771 (3d Cir.1992) (granting mandamus to disqualify judge but refusing to address whether district court's trial plan properly resolved any problems with variations in state law because new judge may adopt a different trial plan).

CERTIORARI TO THE SUPREME COURT OF ILLINOIS.

[33] Mr. Earl B. Dickerson, with whom Messrs. Truman K. Gibson, Jr., C. Francis Stradford, Loring B. Moore, and Irvin C. Mollison were on the brief, for petitioners.

Mr. McKenzie Shannon, with whom Messrs. Angus Roy Shannon, William C. Graves, and Preston B. Kavanagh were on the brief, for respondents.

[37] MR. JUSTICE STONE delivered the opinion of the Court.

The question is whether the Supreme Court of Illinois, by its adjudication that petitioners in this case are bound by a judgment rendered in an earlier litigation to which they were not parties, has deprived them of the due process of law guaranteed by the Fourteenth Amendment.

Respondents brought this suit in the Circuit Court of Cook County, Illinois, to enjoin the breach by petitioners of an agreement restricting the use of land within a described area of the City of Chicago, which was alleged to have been entered into by some five hundred of the landowners. The agreement stipulated that for a specified period no part of the land should be "sold, leased to or permitted to be occupied by any person of the colored [38] race," and provided that it should not be effective unless signed by the "owners of 95 per centum of the frontage" within the described area. The bill of complaint set up that the owners of 95 per cent of the frontage had signed; that respondents are owners of land within the restricted area who have either signed the agreement or acquired their land from others who did sign; and that petitioners Hansberry, who are Negroes, have, with the alleged aid of the other petitioners and with knowledge of the agreement, acquired and are occupying land in the restricted area formerly belonging to an owner who had signed the agreement.

To the defense that the agreement had never become effective because owners of 95 per cent of the frontage had not signed it, respondents pleaded that that issue was res judicata by the decree in an earlier suit. Burke v. Kleiman, 277 Ill. App. 519. To this petitioners pleaded, by way of rejoinder, that they were not parties to that suit or bound by its decree, and that denial of their right to litigate, in the present suit, the issue of performance of the condition precedent to the validity of the agreement would be a denial of due process of law guaranteed by the Fourteenth Amendment. It does not appear, nor is it contended that any of petitioners is the successor in interest to or in privity with any of the parties in the earlier suit.

The circuit court, after a trial on the merits, found that owners of only about 54 per cent of the frontage had signed the agreement, and that the only support of the judgment in the Burke case was a false and fraudulent stipulation of the parties that owners of 95 per cent had signed. But it ruled that the issue of performance of the condition precedent to the validity of the agreement was res judicata as alleged and entered a decree for respondents. The Supreme Court of Illinois affirmed. 372 Ill. 369; 24 N.E.2d 37. We granted certiorari to resolve the constitutional question. 309 U.S. 652.

[39] The Supreme Court of Illinois, upon an examination of the record in Burke v. Kleiman, supra, found that that suit, in the Superior Court of Cook County, was brought by a landowner in the restricted area to enforce the agreement, which had been signed by her predecessor in title, in behalf of herself and other property owners in like situation, against four named individuals, who had acquired or asserted an interest in a plot of land formerly owned by another signer of the agreement; that, upon stipulation of the parties in that suit that the agreement had been signed by owners of 95 per cent of all the frontage, the court had adjudged that the agreement was in force, that it was a covenant running with the land and binding all the land within the described area in the hands of the parties to the agreement and those claiming under them, including defendants, and had entered its decree restraining the breach of the agreement by the defendants and those claiming under them, and that the appellate court had affirmed the decree. It found that the stipulation was untrue but held, contrary to the trial court, that it was not fraudulent or collusive. It also appears from the record in Burke v. Kleiman that the case was tried on an agreed statement of facts which raised only a single issue, whether by reason of changes in the restricted area, the agreement had ceased to be enforcible in equity.

From this the Supreme Court of Illinois concluded in the present case that Burke v. Kleiman was a "class" or "representative" suit, and that in such a suit, "where the remedy is pursued by a plaintiff who has the right to represent the class to which he belongs, other members of the class are bound by the result in the case unless it is reversed or set aside on direct proceedings"; that petitioners in the present suit were members of the class represented by the plaintiffs in the earlier suit and consequently were bound by its decree, which had rendered [40] the issue of performance of the condition precedent to the restrictive agreement res judicata, so far as petitioners are concerned. The court thought that the circumstance that the stipulation in the earlier suit that owners of 95 per cent of the frontage had signed the agreement was contrary to the fact, as found in the present suit, did not militate against this conclusion, since the court in the earlier suit had jurisdiction to determine the fact as between the parties before it, and that its determination, because of the representative character of the suit, even though erroneous, was binding on petitioners until set aside by a direct attack on the first judgment.

State courts are free to attach such descriptive labels to litigations before them as they may choose and to attribute to them such consequences as they think appropriate under state constitutions and laws, subject only to the requirements of the Constitution of the United States. But when the judgment of a state court, ascribing to the judgment of another court the binding force and effect of res judicata, is challenged for want of due process it becomes the duty of this Court to examine the course of procedure in both litigations to ascertain whether the litigant whose rights have thus been adjudicated has been afforded such notice and opportunity to be heard as are requisite to the due process which the Constitution prescribes. Western Life Indemnity Co. v. Rupp, 235 U.S. 261, 273.

It is a principle of general application in Anglo-American jurisprudence that one is not bound by a judgment in personam in a litigation in which he is not designated as a party or to which he has not been made a party by service of process. Pennoyer v. Neff, 95 U.S. 714; 1 Freeman on Judgments (5th ed.), § 407. A judgment rendered in such circumstances is not entitled to the full faith and credit which the Constitution and statute of the United States, R.S. § 905, 28 U.S.C. § 687, prescribe, [41] Pennoyer v. Neff, supra; Lafayette Ins. Co. v. French, 18 How. 404; Hall v. Lanning, 91 U.S. 160; Baker v. Baker, Eccles & Co., 242 U.S. 394; and judicial action enforcing it against the person or property of the absent party is not that due process which the Fifth and Fourteenth Amendments require. Postal Telegraph Cable Co. v. Newport, 247 U.S. 464; Old Wayne Mutual Life Assn. v. McDonough, 204 U.S. 8.

To these general rules there is a recognized exception that, to an extent not precisely defined by judicial opinion, the judgment in a "class" or "representative" suit, to which some members of the class are parties, may bind members of the class or those represented who were not made parties to it. Smith v. Swormstedt, 16 How. 288; Royal Arcanum v. Green, 237 U.S. 531; Hartford Life Ins. Co. v. Ibs, 237 U.S. 662; Hartford Life Ins. Co. v. Barber, 245 U.S. 146; Supreme Tribe of Ben-Hur v. Cauble, 255 U.S. 356; Cf. Christopher v. Brusselback, 302 U.S. 500.

The class suit was an invention of equity to enable it to proceed to a decree in suits where the number of those interested in the subject of the litigation is so great that their joinder as parties in conformity to the usual rules of procedure is impracticable. Courts are not infrequently called upon to proceed with causes in which the number of those interested in the litigation is so great as to make difficult or impossible the joinder of all because some are not within the jurisdiction or because their whereabouts is unknown or where if all were made parties to the suit its continued abatement by the death of some would prevent or unduly delay a decree. In such cases where the interests of those not joined are of the same class as the interests of those who are, and where it is considered that the latter fairly represent the former in the prosecution of the litigation of the issues in which all have a common interest, the court will [42] proceed to a decree. Brown v. Vermuden, Ch. Cas. 272; City of London v. Richmond, 2 Vern. 421; Cockburn v. Thompson, 16 Ves. Jr. 321; West v. Randall, Fed. Cas. No. 17,424; 2 Mason 181; Beatty v. Kurtz, 2 Pet. 566; Smith v. Swormstedt, supra; Supreme Tribe of Ben-Hur v. Cauble, supra; Story, Equity Pleading (2d ed.) § 98.

It is evident that the considerations which may induce a court thus to proceed, despite a technical defect of parties, may differ from those which must be taken into account in determining whether the absent parties are bound by the decree or, if it is adjudged that they are, in ascertaining whether such an adjudication satisfies the requirements of due process and of full faith and credit. Nevertheless, there is scope within the framework of the Constitution for holding in appropriate cases that a judgment rendered in a class suit is res judicata as to members of the class who are not formal parties to the suit. Here, as elsewhere, the Fourteenth Amendment does not compel state courts or legislatures to adopt any particular rule for establishing the conclusiveness of judgments in class suits; cf. Brown v. New Jersey, 175 U.S. 172; Brown v. Mississippi, 297 U.S. 278; United Gas Public Service Co. v. Texas, 303 U.S. 123; Avery v. Alabama, 308 U.S. 444, 446, 447, nor does it compel the adoption of the particular rules thought by this Court to be appropriate for the federal courts. With a proper regard for divergent local institutions and interests, cf. Jackson County v. United States, 308 U.S. 343, 351, this Court is justified in saying that there has been a failure of due process only in those cases where it cannot be said that the procedure adopted, fairly insures the protection of the interests of absent parties who are to be bound by it. Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 235.

It is familiar doctrine of the federal courts that members of a class not present as parties to the litigation [43] may be bound by the judgment where they are in fact adequately represented by parties who are present, or where they actually participate in the conduct of the litigation in which members of the class are present as parties, Plumb v. Goodnow's Administrator, 123 U.S. 560; Confectioners' Machinery Co. v. Racine Engine & Mach. Co., 163 F. 914; 170 F. 1021; Bryant Electric Co. v. Marshall, 169 F. 426, or where the interest of the members of the class, some of whom are present as parties, is joint, or where for any other reason the relationship between the parties present and those who are absent is such as legally to entitle the former to stand in judgment for the latter. Smith v. Swormstedt, supra; cf. Christopher v. Brusselback, supra, 503, 504, and cases cited.

In all such cases, so far as it can be said that the members of the class who are present are, by generally recognized rules of law, entitled to stand in judgment for those who are not, we may assume for present purposes that such procedure affords a protection to the parties who are represented, though absent, which would satisfy the requirements of due process and full faith and credit See Bernheimer v. Converse, 206 U.S. 516; Marin v. Augedahl, 247 U.S. 142; Chandler v. Peketz, 297 U.S. 609. Nor do we find it necessary for the decision of this case to say that, when the only circumstance defining the class is that the determination of the rights of its members turns upon a single issue of fact or law, a state could not constitutionally adopt a procedure whereby some of the members of the class could stand in judgment for all, provided that the procedure were so devised and applied as to insure that those present are of the same class as those absent and that the litigation is so conducted as to insure the full and fair consideration of the common issue. Compare New England Divisions Case, 261 U.S. 184, 197; Taggart v. Bremner, 236 F. 544. [44] We decide only that the procedure and the course of litigation sustained here by the plea of res judicata do not satisfy these requirements.

The restrictive agreement did not purport to create a joint obligation or liability. If valid and effective its promises were the several obligations of the signers and those claiming under them. The promises ran severally to every other signer. It is plain that in such circumstances all those alleged to be bound by the agreement would not constitute a single class in any litigation brought to enforce it. Those who sought to secure its benefits by enforcing it could not be said to be in the same class with or represent those whose interest was in resisting performance, for the agreement by its terms imposes obligations and confers rights on the owner of each plot of land who signs it. If those who thus seek to secure the benefits of the agreement were rightly regarded by the state Supreme Court as constituting a class, it is evident that those signers or their successors who are interested in challenging the validity of the agreement and resisting its performance are not of the same class in the sense that their interests are identical so that any group who had elected to enforce rights conferred by the agreement could be said to be acting in the interest of any others who were free to deny its obligation.

Because of the dual and potentially conflicting interests of those who are putative parties to the agreement in compelling or resisting its performance, it is impossible to say, solely because they are parties to it, that any two of them are of the same class. Nor without more, and with the due regard for the protection of the rights of absent parties which due process exacts, can some be permitted to stand in judgment for all.

It is one thing to say that some members of a class may represent other members in a litigation where the sole and common interest of the class in the litigation, is either to assert a common right or to challenge an [45] asserted obligation. Smith v. Swormstedt, supra; Supreme Tribe of Ben-Hur v. Cauble, supra; Groves v. Farmers State Bank, 368 Ill. 35; 12 N.E.2d 618. It is quite another to hold that all those who are free alternatively either to assert rights or to challenge them are of a single class, so that any group, merely because it is of the class so constituted, may be deemed adequately to represent any others of the class in litigating their interests in either alternative. Such a selection of representatives for purposes of litigation, whose substantial interests are not necessarily or even probably the same as those whom they are deemed to represent, does not afford that protection to absent parties which due process requires. The doctrine of representation of absent parties in a class suit has not hitherto been thought to go so far. See Terry v. Bank of Cape Fear, 20 F. 777, 781; Weidenfeld v. Northern Pacific Ry. Co., 129 F. 305, 310; McQuillen v. National Cash Register Co., 22 F. Supp. 867, 873, aff'd 112 F.2d 877, 882; Brenner v. Title Guarantee & Trust Co., 276 N.Y. 230; 11 N.E.2d 890; cf. Wabash R. Co. v. Adelbert College, 208 U.S. 38; Coe v. Armour Fertilizer Works, 237 U.S. 413. Apart from the opportunities it would afford for the fraudulent and collusive sacrifice of the rights of absent parties, we think that the representation in this case no more satisfies the requirements of due process than a trial by a judicial officer who is in such situation that he may have an interest in the outcome of the litigation in conflict with that of the litigants. Tumey v. Ohio, 273 U.S. 510.

The plaintiffs in the Burke case sought to compel performance of the agreement in behalf of themselves and all others similarly situated. They did not designate the defendants in the suit as a class or seek any injunction or other relief against others than the named defendants, and the decree which was entered did not purport to bind others. In seeking to enforce the agreement the plaintiffs [46] in that suit were not representing the petitioners here whose substantial interest is in resisting performance. The defendants in the first suit were not treated by the pleadings or decree as representing others or as foreclosing by their defense the rights of others; and, even though nominal defendants, it does not appear that their interest in defeating the contract outweighed their interest in establishing its validity. For a court in this situation to ascribe to either the plaintiffs or defendants the performance of such functions on behalf of petitioners here, is to attribute to them a power that it cannot be said that they had assumed to exercise, and a responsibility which, in view of their dual interests it does not appear that they could rightly discharge.

Reversed.

MR. JUSTICE McREYNOLDS, MR. JUSTICE ROBERTS and MR. JUSTICE REED concur in the result.

CERTIORARI TO THE SUPREME COURT OF KANSAS

[798] Arthur R. Miller argued the cause for petitioner. With him on the briefs were Joseph W. Kennedy, Robert W. Coykendall, Kenneth Heady, William G. Paul, and T. L. Cubbage II.

Joel I. Klein argued the cause for respondents. With him on the brief were W. Luke Chapin, Ed Moore, and Harold Greenleaf.^[1]

[799] JUSTICE REHNQUIST delivered the opinion of the Court.

Petitioner is a Delaware corporation which has its principal place of business in Oklahoma. During the 1970's it produced or purchased natural gas from leased land located in 11 different States, and sold most of the gas in interstate commerce. Respondents are some 28,000 of the royalty owners possessing rights to the leases from which petitioner produced the gas; they reside in all 50 States, the District of Columbia, and several foreign countries. Respondents brought a class action against petitioner in the Kansas state court, seeking to recover interest on royalty payments which had been delayed by petitioner. They recovered judgment in the trial court, and the Supreme Court of Kansas affirmed the judgment over petitioner's contentions that the Due Process Clause of the Fourteenth Amendment prevented Kansas from adjudicating the claims of all the respondents, and that the Due Process Clause and the Full Faith and Credit Clause of Article IV of the Constitution prohibited the application of Kansas law to all of the transactions between petitioner and respondents. 235 Kan. 195, 679 P. 2d 1159 (1984). We granted certiorari to consider these claims. 469 U. S. 879 (1984). We reject petitioner's jurisdictional claim, but sustain its claim regarding the choice of law.

Because petitioner sold the gas to its customers in interstate commerce, it was required to secure approval for price increases from what was then the Federal Power Commission, and is now the Federal Energy Regulatory Commission. Under its regulations the Federal Power Commission permitted petitioner to propose and collect tentative higher gas prices, subject to final approval by the Commission. If the Commission eventually denied petitioner's proposed price increase or reduced the proposed increase, petitioner would [800] have to refund to its customers the difference between the approved price and the higher price charged, plus interest at a rate set by statute. See 18 CFR § 154.102 (1984).

Although petitioner received higher gas prices pending review by the Commission, petitioner suspended any increase in royalties paid to the royalty owners because the higher price could be subject to recoupment by petitioner's customers. Petitioner agreed to pay the higher royalty only if the royalty owners would provide petitioner with a bond or indemnity for the increase, plus interest, in case the price increase was not ultimately approved and a refund was due to the customers. Petitioner set the interest rate on the indemnity agreements at the same interest rate the Commission would have required petitioner to refund to its customers. A small percentage of the royalty owners provided this indemnity and received royalties immediately from the interim price increases; these royalty owners are unimportant to this case.

The remaining royalty owners received no royalty on the unapproved portion of the prices until the Federal Power Commission approval of those prices became final. Royalties on the unapproved portion of the gas price were suspended three times by petitioner, corresponding to its three proposed price increases in the mid-1970's. In three written opinions the Commission approved all of petitioner's tentative price increases, so petitioner paid to its royalty owners the suspended royalties of $3.7 million in 1976, $4.7 million in 1977, and $2.9 million in 1978. Petitioner paid no interest to the royalty owners although it had the use of the suspended royalty money for a number of years.

Respondents Irl Shutts, Robert Anderson, and Betty Anderson filed suit against petitioner in Kansas state court, seeking interest payments on their suspended royalties which petitioner had possessed pending the Commission's approval of the price increases. Shutts is a resident of Kansas, and the Andersons live in Oklahoma. Shutts and the Andersons [801] own gas leases in Oklahoma and Texas. Over petitioner's objection the Kansas trial court granted respondents' motion to certify the suit as a class action under Kansas law. Kan. Stat. Ann. § 60-223 et seq. (1983). The class as certified was comprised of 33,000 royalty owners who had royalties suspended by petitioner. The average claim of each royalty owner for interest on the suspended royalties was $100.

After the class was certified respondents provided each class member with notice through first-class mail. The notice described the action and informed each class member that he could appear in person or by counsel; otherwise each member would be represented by Shutts and the Andersons, the named plaintiffs. The notices also stated that class members would be included in the class and bound by the judgment unless they "opted out" of the lawsuit by executing and returning a "request for exclusion" that was included with the notice. The final class as certified contained 28,100 members; 3,400 had "opted out" of the class by returning the request for exclusion, and notice could not be delivered to another 1,500 members, who were also excluded. Less than 1,000 of the class members resided in Kansas. Only a minuscule amount, approximately one quarter of one percent, of the gas leases involved in the lawsuit were on Kansas land.

After petitioner's mandamus petition to decertify the class was denied, Phillips Petroleum v. Duckworth, No. 82-54608 (Kan., June 28, 1982), cert. denied, 459 U. S. 1103 (1983), the case was tried to the court. The court found petitioner liable under Kansas law for interest on the suspended royalties to all class members. The trial court relied heavily on an earlier, unrelated class action involving the same nominal plaintiff and the same defendant, Shutts, Executor v. Phillips Petroleum Co., 222 Kan. 527, 567 P. 2d 1292 (1977), cert. denied, 434 U. S. 1068 (1978). The Kansas Supreme Court had held in Shutts, Executor that a gas company owed interest to royalty owners for royalties suspended pending final Commission approval of a price increase. No federal statutes [802] touched on the liability for suspended royalties, and the court in Shutts, Executor held as a matter of Kansas equity law that the applicable interest rates for computation of interest on suspended royalties were the interest rates at which the gas company would have had to reimburse its customers had its interim price increase been rejected by the Commission. The court in Shutts, Executor viewed these as the fairest interest rates because they were also the rates that petitioner required the royalty owners to meet in their indemnity agreements in order to avoid suspended royalties.

The trial court in the present case applied the rule from Shutts, Executor, and held petitioner liable for prejudgment and postjudgment interest on the suspended royalties, computed at the Commission rates governing petitioner's three price increases. See 18 CFR § 154.102 (1984). The applicable interest rates were: 7% for royalties retained until October 1974; 9% for royalties retained between October 1974 and September 1979; and thereafter at the average prime rate. The trial court did not determine whether any difference existed between the laws of Kansas and other States, or whether another State's laws should be applied to non-Kansas plaintiffs or to royalties from leases in States other than Kansas. 235 Kan., at 221, 679 P. 2d, at 1180.

Petitioner raised two principal claims in its appeal to the Supreme Court of Kansas. It first asserted that the Kansas trial court did not possess personal jurisdiction over absent plaintiff class members as required by International Shoe Co. v. Washington, 326 U. S. 310 (1945), and similar cases. Related to this first claim was petitioner's contention that the "opt-out" notice to absent class members, which forced them to return the request for exclusion in order to avoid the suit, was insufficient to bind class members who were not residents of Kansas or who did not possess "minimum contacts" with Kansas. Second, petitioner claimed that Kansas courts could not apply Kansas law to every claim in the dispute. The trial court should have looked to the laws of each State [803] where the leases were located to determine, on the basis of conflict of laws principles, whether interest on the suspended royalties was recoverable, and at what rate.

The Supreme Court of Kansas held that the entire cause of action was maintainable under the Kansas class-action statute, and the court rejected both of petitioner's claims. 235 Kan. 195, 679 P. 2d 1159 (1984). First, it held that the absent class members were plaintiffs, not defendants, and thus the traditional minimum contacts test of International Shoe did not apply. The court held that nonresident class-action plaintiffs were only entitled to adequate notice, an opportunity to be heard, an opportunity to opt out of the case, and adequate representation by the named plaintiffs. If these procedural due process minima were met, according to the court, Kansas could assert jurisdiction over the plaintiff class and bind each class member with a judgment on his claim. The court surveyed the course of the litigation and concluded that all of these minima had been met.

The court also rejected petitioner's contention that Kansas law could not be applied to plaintiffs and royalty arrangements having no connection with Kansas. The court stated that generally the law of the forum controlled all claims unless "compelling reasons" existed to apply a different law. The court found no compelling reasons, and noted that "[t]he plaintiff class members have indicated their desire to have this action determined under the laws of Kansas." 235 Kan., at 222, 679 P. 2d, at 1181. The court affirmed as a matter of Kansas equity law the award of interest on the suspended royalties, at the rates imposed by the trial court. The court set the postjudgment interest rate on all claims at the Kansas statutory rate of 15%. Id., at 224, 679 P. 2d, at 1183.

I

As a threshold matter we must determine whether petitioner has standing to assert the claim that Kansas did not possess proper jurisdiction over the many plaintiffs in the [804] class who were not Kansas residents and had no connection to Kansas. Respondents claim that a party generally may assert only his own rights, and that petitioner has no standing to assert the rights of its adversary, the plaintiff class, in order to defeat the judgment in favor of the class.

Standing to sue in any Article III court is, of course, a federal question which does not depend on the party's prior standing in state court. Doremus v. Board of Education, 342 U. S. 429, 434 (1952); Baker v. Carr, 369 U. S. 186, 204 (1962). Generally stated, federal standing requires an allegation of a present or immediate injury in fact, where the party requesting standing has "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues." Ibid. There must be some causal connection between the asserted injury and the challenged action, and the injury must be of the type "likely to be redressed by a favorable decision." Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 454 U. S. 464, 472 (1982). See Simon v. Eastern Kentucky Welfare Rights Org., 426 U. S. 26, 41-42 (1976); Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U. S. 252, 261 (1977).

Additional prudential limitations on standing may exist even though the Article III requirements are met because "the judiciary seeks to avoid deciding questions of broad social import where no individual rights would be vindicated and to limit access to the federal courts to those litigants best suited to assert a particular claim." Gladstone, Realtors v. Village of Bellwood, 441 U. S. 91, 99-100 (1979). One of these prudential limits on standing is that a litigant must normally assert his own legal interests rather than those of third parties. See Singleton v. Wulff, 428 U. S. 106 (1976); Craig v. Boren, 429 U. S. 190 (1976).

Respondents claim that petitioner is barred by the rule requiring that a party assert only his own rights; they point out that respondents and petitioner are adversaries and do [805] not have allied interests such that petitioner would be a good proponent of class members' interests. They further urge that petitioner's interference is unneeded because the class members have had opportunity to complain about Kansas' assertion of jurisdiction over their claim, but none have done so. See Singleton, supra, at 113-114.

Respondents may be correct that petitioner does not possess standing jus tertii, but this is not the issue. Petitioner seeks to vindicate its own interests. As a class-action defendant petitioner is in a unique predicament. If Kansas does not possess jurisdiction over this plaintiff class, petitioner will be bound to 28,100 judgment holders scattered across the globe, but none of these will be bound by the Kansas decree. Petitioner could be subject to numerous later individual suits by these class members because a judgment issued without proper personal jurisdiction over an absent party is not entitled to full faith and credit elsewhere and thus has no res judicata effect as to that party. Whether it wins or loses on the merits, petitioner has a distinct and personal interest in seeing the entire plaintiff class bound by res judicata just as petitioner is bound. The only way a class-action defendant like petitioner can assure itself of this binding effect of the judgment is to ascertain that the forum court has jurisdiction over every plaintiff whose claim it seeks to adjudicate, sufficient to support a defense of res judicata in a later suit for damages by class members.

While it is true that a court adjudicating a dispute may not be able to predetermine the res judicata effect of its own judgment, petitioner has alleged that it would be obviously and immediately injured if this class-action judgment against it became final without binding the plaintiff class. We think that such an injury is sufficient to give petitioner standing on its own right to raise the jurisdiction claim in this Court.

Petitioner's posture is somewhat similar to the trust settlor defendant in Hanson v. Denckla, 357 U. S. 235 (1958), who we found to have standing to challenge the forum's personal [806] jurisdiction over an out-of-state trust company which was an indispensable party under the forum State's law. Because the court could not proceed with the action without jurisdiction over the trust company, we observed that "any defendant affected by the court's judgment ha[d] that `direct and substantial personal interest in the outcome' that is necessary to challenge whether that jurisdiction was in fact acquired." Id., at 245, quoting Chicago v. Atchison, T. & S. F. R. Co., 357 U. S. 77 (1958).

II

Reduced to its essentials, petitioner's argument is that unless out-of-state plaintiffs affirmatively consent, the Kansas courts may not exert jurisdiction over their claims. Petitioner claims that failure to execute and return the "request for exclusion" provided with the class notice cannot constitute consent of the out-of-state plaintiffs; thus Kansas courts may exercise jurisdiction over these plaintiffs only if the plaintiffs possess the sufficient "minimum contacts" with Kansas as that term is used in cases involving personal jurisdiction over out-of-state defendants. E. g., International Shoe Co. v. Washington, 326 U. S. 310 (1945); Shaffer v. Heitner, 433 U. S. 186 (1977); World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286 (1980). Since Kansas had no prelitigation contact with many of the plaintiffs and leases involved, petitioner claims that Kansas has exceeded its jurisdictional reach and thereby violated the due process rights of the absent plaintiffs.

In International Shoe we were faced with an out-of-state corporation which sought to avoid the exercise of personal jurisdiction over it as a defendant by a Washington state court. We held that the extent of the defendant's due process protection would depend "upon the quality and nature of the activity in relation to the fair and orderly administration of the laws . . . ." 326 U. S., at 319. We noted that the Due Process Clause did not permit a State to make a binding judgment against a person with whom the State had no contacts, [807] ties, or relations. Ibid. If the defendant possessed certain minimum contacts with the State, so that it was "reasonable and just, according to our traditional conception of fair play and substantial justice" for a State to exercise personal jurisdiction, the State could force the defendant to defend himself in the forum, upon pain of default, and could bind him to a judgment. Id., at 320.

The purpose of this test, of course, is to protect a defendant from the travail of defending in a distant forum, unless the defendant's contacts with the forum make it just to force him to defend there. As we explained in Woodson, supra, the defendant's contacts should be such that "he should reasonably anticipate being haled" into the forum. 444 U. S., at 297. In Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U. S. 694, 702-703, and n. 10 (1982), we explained that the requirement that a court have personal jurisdiction comes from the Due Process Clause's protection of the defendant's personal liberty interest, and said that the requirement "represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty." (Footnote omitted.)

Although the cases like Shaffer and Woodson which petitioner relies on for a minimum contacts requirement all dealt with out-of-state defendants or parties in the procedural posture of a defendant, cf. New York Life Ins. Co. v. Dunlevy, 241 U. S. 518 (1916); Estin v. Estin, 334 U. S. 541 (1948), petitioner claims that the same analysis must apply to absent class-action plaintiffs. In this regard petitioner correctly points out that a chose in action is a constitutionally recognized property interest possessed by each of the plaintiffs. Mullane v. Central Hanover Bank & Trust Co., 339 U. S. 306 (1950). An adverse judgment by Kansas courts in this case may extinguish the chose in action forever through res judicata. Such an adverse judgment, petitioner claims, would be every bit as onerous to an absent plaintiff as an adverse judgment on the merits would be to a defendant. [808] Thus, the same due process protections should apply to absent plaintiffs: Kansas should not be able to exert jurisdiction over the plaintiffs' claims unless the plaintiffs have sufficient minimum contacts with Kansas.

We think petitioner's premise is in error. The burdens placed by a State upon an absent class-action plaintiff are not of the same order or magnitude as those it places upon an absent defendant. An out-of-state defendant summoned by a plaintiff is faced with the full powers of the forum State to render judgment against it. The defendant must generally hire counsel and travel to the forum to defend itself from the plaintiff's claim, or suffer a default judgment. The defendant may be forced to participate in extended and often costly discovery, and will be forced to respond in damages or to comply with some other form of remedy imposed by the court should it lose the suit. The defendant may also face liability for court costs and attorney's fees. These burdens are substantial, and the minimum contacts requirement of the Due Process Clause prevents the forum State from unfairly imposing them upon the defendant.

A class-action plaintiff, however, is in quite a different posture. The Court noted this difference in Hansberry v. Lee, 311 U. S. 32, 40-41 (1940), which explained that a "class" or "representative" suit was an exception to the rule that one could not be bound by judgment in personam unless one was made fully a party in the traditional sense. Ibid., citing Pennoyer v. Neff, 95 U. S. 714 (1878). As the Court pointed out in Hansberry, the class action was an invention of equity to enable it to proceed to a decree in suits where the number of those interested in the litigation was too great to permit joinder. The absent parties would be bound by the decree so long as the named parties adequately represented the absent class and the prosecution of the litigation was within the common interest.^[2] 311 U. S., at 41.

[809] Modern plaintiff class actions follow the same goals, permitting litigation of a suit involving common questions when there are too many plaintiffs for proper joinder. Class actions also may permit the plaintiffs to pool claims which would be uneconomical to litigate individually. For example, this lawsuit involves claims averaging about $100 per plaintiff; most of the plaintiffs would have no realistic day in court if a class action were not available.

In sharp contrast to the predicament of a defendant haled into an out-of-state forum, the plaintiffs in this suit were not haled anywhere to defend themselves upon pain of a default judgment. As commentators have noted, from the plaintiffs' point of view a class action resembles a "quasi-administrative proceeding, conducted by the judge." 3B J. Moore & J. Kennedy, Moore's Federal Practice ¶ 23.45 [4.-5] (1984); Kaplan, Continuing Work of the Civil Committee: 1966 Amendments to the Federal Rules of Civil Procedure (I), 81 Harv. L. Rev. 356, 398 (1967).

A plaintiff class in Kansas and numerous other jurisdictions cannot first be certified unless the judge, with the aid of the named plaintiffs and defendant, conducts an inquiry into the common nature of the named plaintiffs' and the absent plaintiffs' claims, the adequacy of representation, the jurisdiction possessed over the class, and any other matters that will bear upon proper representation of the absent plaintiffs' interest. See, e. g., Kan. Stat. Ann. § 60-223 (1983); Fed. Rule Civ. Proc. 23. Unlike a defendant in a civil suit, a class-action plaintiff is not required to fend for himself. See Kan. Stat. Ann. § 60-223(d) (1983). The court and named plaintiffs protect his interests. Indeed, the class-action defendant itself has a great interest in ensuring that the absent plaintiffs' claims are properly before the forum. In this case, for [810] example, the defendant sought to avoid class certification by alleging that the absent plaintiffs would not be adequately represented and were not amendable to jurisdiction. See Phillips Petroleum v. Duckworth, No. 82-54608 (Kan., June 28, 1982).

The concern of the typical class-action rules for the absent plaintiffs is manifested in other ways. Most jurisdictions, including Kansas, require that a class action, once certified, may not be dismissed or compromised without the approval of the court. In many jurisdictions such as Kansas the court may amend the pleadings to ensure that all sections of the class are represented adequately. Kan. Stat. Ann. § 60-223(d) (1983); see also, e. g., Fed. Rule Civ. Proc. 23(d).

Besides this continuing solicitude for their rights, absent plaintiff class members are not subject to other burdens imposed upon defendants. They need not hire counsel or appear. They are almost never subject to counter claims or cross-claims, or liability for fees or costs.^[3] Absent plaintiff class members are not subject to coercive or punitive remedies. Nor will an adverse judgment typically bind an absent plaintiff for any damages, although a valid adverse judgment may extinguish any of the plaintiff's claims which were litigated.

Unlike a defendant in a normal civil suit, an absent class-action plaintiff is not required to do anything. He may sit back and allow the litigation to run its course, content in knowing that there are safeguards provided for his protection. In most class actions an absent plaintiff is provided at least with an opportunity to "opt out" of the class, and if he takes advantage of that opportunity he is removed from the [811] litigation entirely. This was true of the Kansas proceedings in this case. The Kansas procedure provided for the mailing of a notice to each class member by first-class mail. The notice, as we have previously indicated, described the action and informed the class member that he could appear in person or by counsel, in default of which he would be represented by the named plaintiffs and their attorneys. The notice further stated that class members would be included in the class and bound by the judgment unless they "opted out" by executing and returning a "request for exclusion" that was included in the notice.

Petitioner contends, however, that the "opt out" procedure provided by Kansas is not good enough, and that an "opt in" procedure is required to satisfy the Due Process Clause of the Fourteenth Amendment. Insofar as plaintiffs who have no minimum contacts with the forum State are concerned, an "opt in" provision would require that each class member affirmatively consent to his inclusion within the class.

Because States place fewer burdens upon absent class plaintiffs than they do upon absent defendants in nonclass suits, the Due Process Clause need not and does not afford the former as much protection from state-court jurisdiction as it does the latter. The Fourteenth Amendment does protect "persons," not "defendants," however, so absent plaintiffs as well as absent defendants are entitled to some protection from the jurisdiction of a forum State which seeks to adjudicate their claims. In this case we hold that a forum State may exercise jurisdiction over the claim of an absent class-action plaintiff, even though that plaintiff may not possess the minimum contacts with the forum which would support personal jurisdiction over a defendant. If the forum State wishes to bind an absent plaintiff concerning a claim for money damages or similar relief at law,^[4] it must provide minimal [812] procedural due process protection. The plaintiff must receive notice plus an opportunity to be heard and participate in the litigation, whether in person or through counsel. The notice must be the best practicable, "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Mullane, 339 U. S., at 314-315; cf. Eisen v. Carlisle & Jacquelin, 417 U. S. 156, 174-175 (1974). The notice should describe the action and the plaintiffs' rights in it. Additionally, we hold that due process requires at a minimum that an absent plaintiff be provided with an opportunity to remove himself from the class by executing and returning an "opt out" or "request for exclusion" form to the court. Finally, the Due Process Clause of course requires that the named plaintiff at all times adequately represent the interests of the absent class members. Hansberry, 311 U. S., at 42-43, 45.

We reject petitioner's contention that the Due Process Clause of the Fourteenth Amendment requires that absent plaintiffs affirmatively "opt in" to the class, rather than be deemed members of the class if they do not "opt out." We think that such a contention is supported by little, if any precedent, and that it ignores the differences between class-action plaintiffs, on the one hand, and defendants in nonclass civil suits on the other. Any plaintiff may consent to jurisdiction. Keeton v. Hustler Magazine, Inc., 465 U. S. 770 (1984). The essential question, then, is how stringent the requirement for a showing of consent will be.

We think that the procedure followed by Kansas, where a fully descriptive notice is sent first-class mail to each class member, with an explanation of the right to "opt out," satisfies due process. Requiring a plaintiff to affirmatively [813] request inclusion would probably impede the prosecution of those class actions involving an aggregation of small individual claims, where a large number of claims are required to make it economical to bring suit. See, e. g., Eisen, supra, at 161. The plaintiff's claim may be so small, or the plaintiff so unfamiliar with the law, that he would not file suit individually, nor would he affirmatively request inclusion in the class if such a request were required by the Constitution.^[5] If, on the other hand, the plaintiff's claim is sufficiently large or important that he wishes to litigate it on his own, he will likely have retained an attorney or have thought about filing suit, and should be fully capable of exercising his right to "opt out."

In this case over 3,400 members of the potential class did "opt out," which belies the contention that "opt out" procedures result in guaranteed jurisdiction by inertia. Another 1,500 were excluded because the notice and "opt out" form was undeliverable. We think that such results show that the "opt out" procedure provided by Kansas is by no means pro forma, and that the Constitution does not require more to protect what must be the somewhat rare species of class member who is unwilling to execute an "opt out" form, but whose claim is nonetheless so important that he cannot be presumed to consent to being a member of the class by his failure to do so. Petitioner's "opt in" requirement would require the invalidation of scores of state statutes and of the class-action provision of the Federal Rules of Civil Procedure,^[6] [814] and for the reasons stated we do not think that the Constitution requires the State to sacrifice the obvious advantages in judicial efficiency resulting form the "opt out" approach for the protection of the rara avis portrayed by petitioner.

We therefore hold that the protection afforded the plaintiff class members by the Kansas statute satisfies the Due Process Clause. The interest of the absent plaintiffs are sufficiently protected by the forum State when those plaintiffs are provided with a request for exclusion that can be returned within a reasonable time to the court. See Insurance Corp. of Ireland, 456 U. S., at 702-703, and n. 10. Both the Kansas trial court and the Supreme Court of Kansas held that the class received adequate representation, and no party disputes that conclusion here. We conclude that the Kansas court properly asserted personal jurisdiction over the absent plaintiffs and their claims against petitioner.

III

The Kansas courts applied Kansas contract and Kansas equity law to every claim in this case, notwithstanding that [815] over 99% of the gas leases and some 97% of the plaintiffs in the case had no apparent connection to the State of Kansas except for this lawsuit.^[7] Petitioner protested that the Kansas [816] courts should apply the laws of the States where the leases were located, or at least apply Texas and Oklahoma law because so many of the leases came from those States. The Kansas courts disregarded this contention and found petitioner liable for interest on the suspended royalties as a matter of Kansas law, and set the interest rates under Kansas equity principles.

Petitioner contends that total application of Kansas substantive law violated the constitutional limitations on choice of law mandated by the Due Process Clause of the Fourteenth Amendment and the Full Faith and Credit Clause of Article IV, § 1. We must first determine whether Kansas law conflicts in any material way with any other law which could apply. There can be no injury in applying Kansas law if it is not in conflict with that of any other jurisdiction connected to this suit.

Petitioner claims that Kansas law conflicts with that of a number of States connected to this litigation, especially Texas and Oklahoma. These putative conflicts range from the direct to the tangential, and may be addressed by the Supreme Court of Kansas on remand under the correct constitutional standard. For example, there is no recorded [817] Oklahoma decision dealing with interest liability for suspended royalties: whether Oklahoma is likely to impose liability would require a survey of Oklahoma oil and gas law. Even if Oklahoma found such liability, petitioner shows that Oklahoma would most likely apply its constitutional and statutory 6% interest rate rather than the much higher Kansas rates applied in this litigation. Okla. Const., Art XIV, § 2; Okla. Stat., Tit. 15, § 266 (Supp. 1984-1985); Rendezvous Trails of America, Inc. v. Ayers, 612 P. 2d 1384, 1385 (Okla. App. 1980); Smith v. Robinson, 594 P. 2d 364 (Okla. 1979); West Edmond Hunton Lime Unit v. Young, 325 P. 2d 1047 (Okla. 1958).

Additionally, petitioner points to an Oklahoma statute which excuses liability for interest if a creditor accepts payment of the full principal without a claim for interest, Okla. Stat., Tit. 23, § 8 (1951). Cf. Webster Drilling Co. v. Sterling Oil of Oklahoma, Inc., 376 P. 2d 236 (Okla. 1962). Petitioner contends that by ignoring this statute the Kansas courts created liability that does not exist in Oklahoma.

Petitioner also points out several conflicts between Kansas and Texas law. Although Texas recognizes interest liability for suspended royalties, Texas has never awarded any such interest at a rate greater than 6%, which corresponds with the Texas constitutional and statutory rate.^[8] Tex. Const., Art. 16, § 11; Tex. Rev. Civ. Stat. Ann., Art. 5069-1.03 (Vernon 1971). See Phillips Petroleum Co. v. Stahl Petroleum Co., 569 S. W. 2d 480 (Tex. 1978); Phillips Petroleum Co. v. Adams, 513 F. 2d 355 (CA5), cert. denied, 423 U. S. 930 (1975); cf. Maxey v. Texas Commerce Bank, 580 S. W. 2d 340, 341 (Tex. 1979). Moreover, at least one court interpreting Texas law appears to have held that Texas excuses interest [818] liability once the gas company offers to take an indemnity from the royalty owner and pay him the suspended royalty while the price increase is still tentative. Phillips Petroleum Co. v. Riverside Gas Compression Co., 409 F. Supp. 486, 495-496 (ND Tex. 1976). Such a rule is contrary to Kansas law as applied below, but if applied to the Texas plaintiffs or leases in this case, would vastly reduce petitioner's liability.

The conflicts on the applicable interest rates, alone — which we do not think can be labeled "false conflicts" without a more thoroughgoing treatment than was accorded them by the Supreme Court of Kansas — certainly amounted to millions of dollars in liability. We think that the Supreme Court of Kansas erred in deciding on the basis that it did that the application of its laws to all claims would be constitutional.

Four Terms ago we addressed a similar situation in Allstate Ins. Co. v. Hague, 449 U. S. 302 (1981). In that case we were confronted with two conflicting rules of state insurance law. Minnesota permitted the "stacking" of separate uninsured motorist policies while Wisconsin did not. Although the decedent lived in Wisconsin, took out insurance policies and was killed there, he was employed in Minnesota, and after his death his widow moved to Minnesota for reasons unrelated to the litigation, and was appointed personal representative of his estate. She filed suit in Minnesota courts, which applied the Minnesota stacking rule.

The plurality in Allstate noted that a particular set of facts giving rise to litigation could justify, constitutionally, the application of more than one jurisdiction's laws. The plurality recognized, however, that the Due Process Clause and the Full Faith and Credit Clause provided modest restrictions on the application of forum law. These restrictions required "that for a State's substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair." Id., at 312-313. The [819] dissenting Justices were in substantial agreement with this principle. Id., at 332 (opinion of POWELL, J., joined by BURGER, C. J., and REHNQUIST, J.). The dissent stressed that the Due Process Clause prohibited the application of law which was only casually or slightly related to the litigation, while the Full Faith and Credit Clause required the forum to respect the laws and judgments of other States, subject to the forum's own interests in furthering its public policy. Id., at 335-336.

The plurality in Allstate affirmed the application of Minnesota law because of the forum's significant contacts to the litigation which supported the State's interest in applying its law. See id., at 313-329. Kansas' contacts to this litigation, as explained by the Kansas Supreme Court, can be gleaned from the opinion below.

Petitioner owns property and conducts substantial business in the State, so Kansas certainly has an interest in regulating petitioner's conduct in Kansas. 235 Kan., at 210, 679 P. 2d, at 1174. Moreover, oil and gas extraction is an important business to Kansas, and although only a few leases in issue are located in Kansas, hundreds of Kansas plaintiffs were affected by petitioner's suspension of royalties; thus the court held that the State has a real interest in protecting "the rights of these royalty owners both as individual residents of [Kansas] and as members of this particular class of plaintiffs." Id., at 211-212, 679 P. 2d, at 1174. The Kansas Supreme Court pointed out that Kansas courts are quite familiar with this type of lawsuit, and "[t]he plaintiff class members have indicated their desire to have this action determined under the laws of Kansas." Id., at 211, 222, 679 P. 2d, at 1174, 1181. Finally, the Kansas court buttressed its use of Kansas law by stating that this lawsuit was analogous to a suit against a "common fund" located in Kansas. Id., at 201, 211-212, 679 P. 2d, at 1168, 1174.

We do not lightly discount this description of Kansas' contacts with this litigation and its interest in applying its law. There is, however, no "common fund" located in Kansas that [820] would require or support the application of only Kansas law to all these claims. See, e. g., Hartford Life Ins. Co. v. Ibs, 237 U. S. 662 (1915). As the Kansas court noted, petitioner commingled the suspended royalties with its general corporate accounts. 235 Kan., at 201, 679 P. 2d, at 1168. There is no specific identifiable res in Kansas, nor is there any limited amount which may be depleted before every plaintiff is compensated. Only by somehow aggregating all the separate claims in this case could a "common fund" in any sense be created, and the term becomes all but meaningless when used in such an expansive sense.

We also give little credence to the idea that Kansas law should apply to all claims because the plaintiffs, by failing to opt out, evinced their desire to be bound by Kansas law. Even if one could say that the plaintiffs "consented" to the application of Kansas law by not opting out, plaintiff's desire for forum law is rarely, if ever controlling. In most cases the plaintiff shows his obvious wish for forum law by filing there. "If a plaintiff could choose the substantive rules to be applied to an action . . . the invitation to forum shopping would be irresistible." Allstate, supra, at 337 (opinion of POWELL, J.). Even if a plaintiff evidences his desire for forum law by moving to the forum, we have generally accorded such a move little or no significance. John Hancock Mut. Life Ins. Co. v. Yates, 299 U. S. 178, 182 (1936); Home Ins. Co. v. Dick, 281 U. S. 397, 408 (1930). In Allstate the plaintiff's move to the forum was only relevant because it was unrelated and prior to the litigation. 449 U. S., at 318-319. Thus the plaintiffs' desire for Kansas law, manifested by their participation in this Kansas lawsuit, bears little relevance.

The Supreme Court of Kansas in its opinion in this case expressed the view that by reason of the fact that it was adjudicating a nationwide class action, it had much greater latitude in applying its own law to the transactions in question than might otherwise be the case:

[821] "The general rule is that the law of the forum applies unless it is expressly shown that a different law governs, and in case of doubt, the law of the forum is preferred.. . . Where a state court determines it has jurisdiction over a nationwide class action and procedural due process guarantees of notice and adequate representation are present, we believe the law of the forum should be applied unless compelling reasons exist for applying a different law. . . . Compelling reasons do not exist to require this court to look to other state laws to determine the rights of the parties involved in this lawsuit." 235 Kan., at 221-222, 679 P. 2d, at 1181.

We think that this is something of a "bootstrap" argument. The Kansas class-action statute, like those of most other jurisdictions, requires that there be "common issues of law or fact." But while a State may, for the reasons we have previously stated, assume jurisdiction over the claims of plaintiffs whose principal contacts are with other States, it may not use this assumption of jurisdiction as an added weight in the scale when considering the permissible constitutional limits on choice of substantive law. It may not take a transaction with little or no relationship to the forum and apply the law of the forum in order to satisfy the procedural requirement that there be a "common question of law." The issue of personal jurisdiction over plaintiffs in a class action is entirely distinct from the question of the constitutional limitations on choice of law; the latter calculus is not altered by the fact that it may be more difficult or more burdensome to comply with the constitutional limitations because of the large number of transactions which the State proposes to adjudicate and which have little connection with the forum.

Kansas must have a "significant contact or significant aggregation of contacts" to the claims asserted by each member of the plaintiff class, contacts "creating state interests," in order to ensure that the choice of Kansas law is not arbitrary [822] or unfair. Allstate, 449 U. S., at 312-313. Given Kansas' lack of "interest" in claims unrelated to that State, and the substantive conflict with jurisdictions such as Texas, we conclude that application of Kansas law to every claim in this case is sufficiently arbitrary and unfair as to exceed constitutional limits.^[9]

When considering fairness in this context, an important element is the expectation of the parties. See Allstate, supra, at 333 (opinion of POWELL, J.). There is no indication that when the leases involving land and royalty owners outside of Kansas were executed, the parties had any idea that Kansas law would control. Neither the Due Process Clause nor the Full Faith and Credit Clause requires Kansas "to substitute for its own [laws], applicable to persons and events within it, the conflicting statute of another state," Pacific Employees Ins. Co. v. Industrial Accident Comm'n, 306 U. S. 493, 502 (1939), but Kansas "may not abrogate the rights of parties beyond its borders having no relation to anything done or to be done within them." Home Ins. Co. v. Dick, supra, at 410.

Here the Supreme Court of Kansas took the view that in a nationwide class action where procedural due process guarantees [823A] of notice and adequate representation were met, "the law of the forum should be applied unless compelling reasons exist for applying a different law." 235 Kan., at 221, 679 P. 2d, at 1181. Whatever practical reasons may have commended this rule to the Supreme Court of Kansas, for the reasons already stated we do not believe that it is consistent with the decisions of this Court. We make no effort to determine for ourselves which law must apply to the various transactions involved in this lawsuit, and we reaffirm our observation in Allstate that in many situations a state court may be free to apply one of several choices of law. But the constitutional limitations laid down in cases such as Allstate and Home Ins. Co. v. Dick, supra, must be respected even in a nationwide class action.

We therefore affirm the judgment of the Supreme Court of Kansas insofar as it upheld the jurisdiction of the Kansas courts over the plaintiff class members in this case, and reverse its judgment insofar as it held that Kansas law was applicable to all of the transactions which it sought to adjudicate. We remand the case to that court for further proceedings not inconsistent with this opinion.

It is so ordered.

JUSTICE POWELL took no part in the decision of this case.

[823B] JUSTICE STEVENS, concurring in part and dissenting in part.

For the reasons stated in Parts I and II of the Court's opinion, I agree that the Kansas courts properly exercised jurisdiction over this class action. I also recognize that the use of the word "compelling" in a portion of the Kansas Supreme Court's opinion, when read out of context, may create an inaccurate impression of that court's choice-of-law holding. See ante, at 821. Our job, however, is to review judgments, not to edit opinions, and I am firmly convinced that there is no constitutional defect in the judgment under review.

As the Court recognizes, there "can be no [constitutional] injury in applying Kansas law if it is not in conflict with that [824] of any other jurisdiction connected to this suit." Ante, at 816. A fair reading of the Kansas Supreme Court's opinion in light of its earlier opinion in Shutts v. Phillips Petroleum Co., 222 Kan. 527, 567 P. 2d 1292 (1977) (hereinafter Shutts I), cert. denied, 434 U. S. 1068 (1978), reveals that the Kansas court has examined the laws of connected jurisdictions and has correctly concluded that there is no "direct" or "substantive" conflict between the law applied by Kansas and the laws of those other States. Cf. ante, at 816, 821-822. Kansas has merely developed general common-law principles to accommodate the novel facts of this litigation — other state courts either agree with Kansas or have not yet addressed precisely similar claims. Consequently, I conclude that the Full Faith and Credit Clause of the Constitution^[10] did not require Kansas to apply the law of any other State, and the Fourteenth Amendment's Due Process Clause^[11] did not prevent Kansas from applying its own law in this case.

The Court errs today because it applies a loose definition of the sort of "conflict" of laws required to state a constitutional claim, allowing Phillips a tactical victory here merely on allegations of "putative" or "likely" conflicts. Ante, at 816, 817. The Court's choice-of-law analysis also treats the two relevant constitutional provisions as though they imposed the same constraints on the forum court. In my view, however, the potential impact of the Kansas choice on the interests of other sovereign States and the fairness of its decision to the litigants should be separately considered. See Allstate Insurance Co. v. Hague, 449 U. S. 302, 320 (1981) (STEVENS, J., concurring in judgment). For both inquiries, it [825] is essential to have a better understanding of the merits of the underlying dispute than can be gleaned from the Court's opinion. I therefore begin with an explanation of the background of this litigation.

I

Petitioner (Phillips) is a large independent producer, purchaser, and seller of natural gas. Beginning in 1954, the prices at which it sold natural gas to interstate pipeline companies were regulated by the Federal Power Commission (Commission).^[12]Phillips Petroleum Co. v. Wisconsin, 347 U. S. 672 (1954). As a party to a large number of producing oil and gas leases, Phillips is obligated to pay a percentage of the value of the production, usually one-eighth, to persons owning an interest in the leased areas, so-called "royalty owners." Some royalty owners are due monthly royalties by contractual agreements made directly with Phillips. See Shutts I, supra, at 532, 567 P. 2d, at 1298. Others are due royalties under contracts made with other gas producers who then sell their gas to Phillips — by separate contract with those producers, Phillips has "assumed the producer's responsibility to distribute the royalties . . . to the royalty owners." 235 Kan. 195, 218, 679 P. 2d 1159, 1178 (1984). The relationship between Phillips and the royalty owners is not regulated by the Commission although it is, of course, materially affected by the Commission's control over the pricing relationship between Phillips and its customers.

In a series of orders entered after 1954, the Commission established a practice of suspending price increases proposed by Phillips until approved by the Commission, but allowing Phillips to collect the higher proposed prices upon the filing by Phillips with the Commission of a corporate undertaking to refund to its customers any portion of an increase [826] that is ultimately disapproved by the Commission. Pursuant to Commission regulation, Phillips agrees that unapproved prices it collects are subject to refund "with interest at seven percent (7%) per annum from the date of receipt until September 18, 1970, and eight percent (8%) per annum thereafter until paid out, if the FPC [does] not approve the sales price." Shutts I, supra, at 533, 567 P. 2d, at 1299 (emphasis deleted) (citing 18 CFR § 154.102(c) (1977) and Commission opinion No. 586, 44 F. P. C. 761, 791 (1970)). Phillips' receipts during periods when its proposed price increases have not yet received final approval therefore include two components — the "firm" proceeds and the "FPC suspense money." For example, while an increase in price from 11 cents per Mcf (thousand cubic feet) to 13 cents is under consideration, the collection of the higher price would include firm proceeds of 11 cents and 2 cents of FPC suspense money.

In July 1961, while a price increase applicable to the tristate Hugoton-Anadarko area (Kansas, Oklahoma, and Texas) was pending, Phillips sent a notice to the royalty owners for that area advising them that "until further notice" they would be paid royalties on the basis of firm proceeds only and that royalties based on suspense money would be paid only after it was "determined that the sums collected are no longer subject to refund." The notice also advised the royalty owners that they could receive ongoing payment of royalties on the suspense money as well if they furnished Phillips with an "acceptable indemnity to cover their proportionate part of any required refunds, plus the required interest." Shutts I, 222 Kan., at 534, 567 P. 2d, at 1299 (emphasis added).^[13] The indemnity which Phillips required was a corporate [827] security bond covering a principal amount based on estimated production for a 2-year period, plus the 7% interest rate Phillips would be required to pay to its customers if the price increase were not approved. Only 17 royalty owners provided Phillips with such an indemnity; approximately 6,400 royalty owners who did not do so did not receive royalties on the suspense proceeds until 11 years later, after the price increase was finally approved. The situation was succinctly summarized by the Kansas Supreme Court in Shutts I:

"From June 1, 1961, to October 1, 1970, Phillips deposited the increased rate monies collected in its general account and commingled it with its other funds, without ever giving notice of this fact to royalty owners during the time it was holding money. It is important to note that during this period of time Phillips had no entitlement to the gas royalty owners' share of the `suspense royalties,' whether or not the rates were approved by the FPC. Phillips never owned this money. While Phillips collected eight-eighths (8/8) of the increased rates, under no condition was the one-eighth (1/8) of the increase attributable to the royalty owners ever to go to Phillips. That royalty share, according to eventual FPC ruling, was either to go to Phillips' royalty owners, or back to Phillips' gas purchasers with interest, or part to one and part to the other." Id., at 535, 567 P. 2d, at 1300 (emphasis in original).

[828] In 1970, the Commission entered an order approving Phillips' Hugoton-Anadarko price increases to the extent of approximately $153,000,000 and disapproving them to the extent of approximately $29,000,000. Thus, over 18% of the suspense money had to be refunded to Phillips' customers, with interest at the rates to which Phillips had agreed under Commission regulation. Having no jurisdiction over the relationship between Phillips and the royalty owners, however, the Commission's order was silent on the subject of royalties on the $153 million of suspense money that did not have to be refunded. After the Commission's order was finally affirmed by the Ninth Circuit in 1972, In re Hugoton-Anadarko Area Rate Case, 466 F. 2d 974, Phillips mailed checks to the royalty owners for their share of the suspense moneys based on the approved higher prices that had been collected since 1961. However, "Phillips neither paid nor offered to pay any interest for the use of the money, nor did Phillips say anything about interest or how long the money had been held or used by Phillips." Shutts I, supra, at 537, 567 P. 2d, at 1301.

The foregoing facts gave rise to Shutts I. This case (Shutts II) involves suspense royalties due on similar price increases approved in 1976, 1977, and 1978 to a larger number of royalty owners (28,100) with interests in leased areas located in 11 States, including Kansas. Otherwise, however, "[w]ith a few exceptions this case is similar in legal issues and factual situation to that presented in Shutts [I]." 235 Kan., at 198, 679 P. 2d, at 1165. Both cases involve what the Kansas Supreme Court has characterized as a "common fund" consisting of the suspense royalties undeniably owed by Phillips [829] but not paid for periods of several years while Commission approval of rate increases were pending.^[14] It is undisputed that Phillips enjoyed the unfettered use of that money. See 222 Kan., at 560, 567 P. 2d, at 1316 (testimony of Phillips' Treasurer). It is also undisputed that when the Commission proceedings ended, none of the money could be retained by Phillips. To the extent that a price increase was disapproved, a refund to the purchasing pipelines, plus interest at the rate set by the Commission, would be required; to the extent that the increases were approved, the money was contractually owned to the royalty owners. As the Kansas court noted: "What is significant is these gas royalty suspense monies never did nor could belong to Phillips." Ibid. (emphasis deleted).^[15]

[830] In Shutts I, the Kansas Supreme Court held that general equitable principles required the award of interest on royalties owned to royalty owners but used by Phillips for a number of years. In support of that conclusion it relied on general statements in two Kansas cases^[16] and a long line of federal cases applying Texas law and concluding that equity requires "the award of interest on suspense royalties under similar circumstances." Id., at 561, 567 P. 2d, at 1317.^[17] The court noted that Oklahoma had no decisions allowing interest on suspense royalties, but concluded that "several Oklahoma decisions hold that interest may be awarded on equitable grounds where necessary to arrive at a fair compensation. (Smith v. Owens, 397 P. 2d 673 [Okla. 1963]; and First Nat. Bank & T. Co. v. Exchange Nat. Bank and T. Co., 517 P. 2d 805 [Okla. App. 1973])."^[18] Finally, the court construed the royalty agreements at issue as containing a "contractual [831] obligation" to pay interest on the royalties "for the period of time the suspense money was held and used by Phillips." Id., at 562, 567 P. 2d, at 1317. Thus the Kansas court also found its result consistent with the only Texas state-court decision on point, Stahl Petroleum Co. v. Phillips Petroleum Co., 550 S. W. 2d 360 (Tex. Civ. App. 1977), which had "awarded interest on suspended royalties" based on "the terms of the royalty agreement . . . rather than unjust enrichment." 222 Kan., at 561, 567 P. 2d, at 1317. Significantly, when the Texas Supreme Court subsequently affirmed the Stahl judgment, it relied on the Kansas Supreme Court's decision in Shutts I to decide that equity as well as contract law requires interest on suspense royalties. Phillips Petroleum Co. v. Stahl Petroleum Co., 569 S. W. 2d 480, 485-488, and n. 5 (1978).

After determining that Phillips was liable for interest on the suspense royalties, the court reversed the trial court's decision that the rate should be 6% because that was the statutory interest rate in Kansas, Oklahoma, and Texas. The Kansas Supreme Court noted that the statutory rate in all three States expressly applied only when no other rate had been agreed upon,^[19] and that in this case Phillips had made an express agreement, evidenced by its corporate undertaking, to pay interest at the rate set by the Commission on suspense moneys found refundable. 222 Kan., at 564, 567 P. 2d, at 1319. The Kansas court therefore declined to apply any State's interest statute, including its own. "[E]quitable principles require, and contractual principles dictate, that the royalty owners receive the same treatment" as refunded purchasers, [832] that is, payment at the same FPC rate of interest.^[20]Id., at 563, 567 P. 2d, at 1318.

Finally, the Kansas Supreme Court rejected Phillips' contention that royalty owners had "waived" their claims to interest by accepting payment of the royalties later or by failing to post an indemnity "acceptable" to Phillips in order to receive contemporaneous payment of suspense royalties. The court noted that the "conditions imposed by Phillips were far more stringent than the corporate undertaking Phillips filed with the FPC," id., at 567, 567 P. 2d, at 1320, and concluded that it was "apparent [that] Phillips' previous imposition of burdensome conditions upon royalty owners . . . was designed to accomplish precisely what the facts disclose. Virtually none of the royalty owners complied with the conditions, thereby leaving the suspense royalties in the hands of Phillips as stakeholder to use at its pleasure . . . ." Id., at 566, 567 P. 2d, at 1320. The court found the rule that "payment of the principal sum is a legal bar to a subsequent action for interest" inapplicable on these facts. Id., at 567, 567 P. 2d, at 1321. Instead, because "payment of [the royalties due] to the plaintiff class members, instead of extinguishing the debt, constituted only a partial payment on an interest-bearing debt[,] [t]his situation invokes application of the so-called `United States Rule,' which provides that in applying partial payments to an interest-bearing debt which is due, in [833] the absence of an agreement or statute to the contrary, the payment should be first applied to the interest due." Ibid.^[21]

In Shutts II, the case now under review, the Kansas Supreme Court adopted its earlier analysis in Shutts I without repeating it. "Although a larger class is involved than in Shutts I, the legal issues presented are substantially the same. While these issues are complex they were thoroughly reviewed in Shutts I." 235 Kan., at 211, 679 P. 2d, at 1174.^[22] Noting that "Phillips has not satisfactorily established why this court should not apply the rule enunciated in Shutts I," the Kansas court went on to state that once jurisdiction over [834] a "nationwide class action" is properly asserted, "the law of the forum should be applied unless compelling reasons exist for applying a different law." Id., at 221, 679 P. 2d, at 1181.

II

This Court, of course, can have no concern with the substantive merits of common-law decisions reached by state courts faithfully applying their own law or the law of another State. When application of purely state law is at issue, "[t]he power delegated to us is for the restraint of unconstitutional [action] by the States, and not for the correction of alleged errors committed by their judiciary." Commercial Bank of Cincinnati v. Buckingham's Executors, 5 How. 317, 343 (1847). The Constitution does not expressly mandate particular or correct choices of law. Rather, a state court's choice of law can invoke constitutional protections, and hence our jurisdiction, only if it contravenes some explicit constitutional limitation.^[23]

Thus it has long been settled that "a mere misconstruction by the forum of the laws of a sister State is not a violation of the Full Faith and Credit Clause." Carroll v. Lanza, 349 U. S. 408, 414, n. 1 (1955) (Frankfurter, J., dissenting).^[24] That Clause requires only that States accord "full faith and credit" to other States' laws — that is, acknowledge the validity and finality of such laws and attempt in good faith to apply them when necessary as they would be applied by home state [835] courts.^[25] But as Justice Holmes explained, when there is "nothing to suggest that [one State's court] was not candidly construing [another State's law] to the best of its ability, . . . even if it was wrong something more than an error of construction is necessary" to invoke the Constitution. Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U. S. 93, 96 (1917).

Merely to state these general principles is to refute any argument that Kansas' decision below violated the Full Faith and Credit Clause. As the opinion in Shutts I indicates, the Kansas court made a careful survey of the relevant laws of Oklahoma and Texas, the only other States whose law is proffered as relevant to this litigation. But, as the Court acknowledges, ante, at 816-818, no other State's laws or judicial decisions were precisely on point, and, in the Kansas court's judgment, roughly analogous Texas and Oklahoma cases supported the results the Kansas court reached. The Kansas court expressly declared that, in a multistate action, a "court should also give careful consideration, as we have attempted to do, to any possible conflict of law problems." 222 Kan., at 557, 567 P. 2d, at 1314.^[26] While a common-law judge might disagree with the substantive legal determinations made by the Kansas court (although nothing in its opinion seems erroneous to me), that court's approach to the possible choices of law evinces precisely the "full faith and credit" that the Constitution requires.

[836] It is imaginable that even a good-faith review of another State's law might still "unjustifiably infring[e] upon the legitimate interests of another State" so as to violate the Full Faith and Credit Clause. Allstate, 449 U. S., at 323 (STEVENS, J., concurring in judgment). If, for example, a Texas oil company or a Texas royalty owner with an interest in a Texas lease were treated directly contrary to a stated policy of the State of Texas by a Kansas court through some honest blunder, the Constitution might bar such "parochial entrenchment" on Texas' interests. Thomas v. Washington Gas Light Co., 448 U. S. 261, 272 (1980) (plurality opinion).^[27] But this case is so distant from such a situation that I need not pursue this theoretical possibility. Even Phillips does not contend that any stated policies of other States have been plainly contravened, and the Court's discussion is founded merely on an absence of reported decisions and the Court's speculation of what Oklahoma or Texas courts might "most likely" do in a case like this. Ante, at 817. There is simply no demonstration here that the Kansas Supreme Court's decision has impaired the legitimate interests of any other States or infringed on their sovereignty in the slightest.

[837] III

It is nevertheless possible for a State's choice of law to violate the Constitution because it is so "totally arbitrary or. . . fundamentally unfair" to a litigant that it violates the Due Process Clause. Allstate, 449 U. S., at 326 (STEVENS, J., concurring in judgment). If the forum court has no connection to the lawsuit other than its jurisdiction over the parties, a decision to apply the forum State's law might so "frustrat[e] the justifiable expectations of the parties" as to be unconstitutional. Id., at 327.^[28]

Again, however, a constitutional claim of "unfair surprise" cannot be based merely upon an unexpected choice of a particular State's law — it must rest on a persuasive showing of an unexpected result arrived at by application of that law. Thus, absent any conflict of laws, in terms of the results they produce, the Due Process Clause simply has not been violated. This is because the underlying theory of a choice-of-law due process claim must be that parties plan their conduct and contractual relations based upon their legitimate expectations [838] concerning the subsequent legal consequences of their actions. For example, they might base a decision on the belief that the law of a particular State will govern. But a change in that State's law in the interim between the execution and the performance of the contract would not violate the Due Process Clause. Nor would the Constitution be violated simply because a state court made an unanticipated ruling on a previously unanswered question of law — perhaps a choice-of-law question.

In this case it is perfectly clear that there has been no due process violation because this is a classic "false conflicts" case.^[29] Phillips has not demonstrated that any significant conflicts exist merely because Oklahoma and Texas state case law is silent concerning the equitable theories developed by the Kansas courts in this litigation, or even because the language of some Oklahoma and Texas statutes suggests that those States would "most likely" reach different results. Ante, at 816-818. The Court's heavy reliance on the characterization of the law provided by Phillips is not an adequate substitute for a neutral review. Ante, at 816, 817 ("Petitioner claims," "petitioner shows," "petitioner points to," "Petitioner also points out . . ."). As is unmistakable from a review of Shutts I, the Kansas Supreme Court has examined the same laws cited by the Court today as indicative of "direct" conflicts, and construed them as supportive of the [839] Kansas result.^[30] Our precedents, to say nothing of the Constitution and our statutory jurisdiction to review state-court judgments, do not permit the Court to second-guess these substantive judgments. Moreover, an independent examination demonstrates solid support for the Kansas court's conclusions.^[31]

[840] The crux of my disagreement with the Court is over the standard applied to evaluate the sufficiency of allegations of choice-of-law conflicts necessary to support a constitutional [841] claim. Rather than potential, "putative," or even "likely" conflicts, I would require demonstration of an unambiguous conflict with the established law of another State as an essential element of a constitutional choice-of-law claim. Arguments that a state court has merely applied general common-law principles in a novel manner, or reconciled arguably [842] conflicting laws erroneously in the face of unprecedented factual circumstances should not suffice to make out a constitutional issue.

In this case, the Kansas Supreme Court's application of general principles of equity, its interpretation of the agreements, its reliance on the Commission's regulations,^[32] and its construction of general statutory terms contravened no established legal principles of other States and consequently cannot be characterized as either arbitrary or fundamentally unfair to Phillips. I therefore can find no due process violation in the Kansas court's decision.^[33]

[843] IV

In final analysis, the Court today may merely be expressing its disagreement with the Kansas Supreme Court's statement that in a "nationwide class action . . . the law of the forum should be applied unless compelling reasons exist for applying a different law." 235 Kan., at 221, 679 P. 2d, at 1181. Considering this statement against the background of the Kansas Supreme Court's careful analysis in Shutts I, however, I am confident that court would agree that every state court has an obligation under the Full Faith and Credit Clause to "respect the legitimate interests of other States and avoid infringement upon their sovereignty." Allstate, 449 U. S., at 322 (STEVENS, J., concurring in judgment); see Nevada v. Hall, 440 U. S. 410, 421, 424, n. 24 (1979).

It is also agreed that "the fact that a choice-of-law decision may be unsound . . . does not necessarily implicate the federal concerns embodied in the Full Faith and Credit Clause." Allstate, 449 U. S., at 323 (STEVENS, J., concurring in judgment); see ante, at 823 ("in many situations a state court may be free to apply one of several choices of law"); Allstate, 449 U. S., at 307 (plurality opinion). When a suit involves claims connected to States other than the forum State, the Constitution requires only that the relevant laws of other States that are brought to the attention of the forum court be examined fairly prior to making a choice of law.^[34] Because this Court "reviews judgments, not opinions," Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 842 (1984), criticism of a portion of the Kansas [844] court's opinion taken out of context provides an insufficient basis for reversing its judgment. Unless the actual choice of Kansas law violated substantial constitutional rights of the parties, see 28 U. S. C. § 2111, our power to review judgments of state law — including the state law of choice of law — does not extend to reversal based on disagreement with the law's application. A review of the record and the underlying litigation here convincingly demonstrates that, despite Phillips' protestations regarding Kansas' development of common-law principles, no disregard for the laws of other States nor unfair application of Kansas law to the litigants has occurred.^[35] Phillips has no constitutional right to avoid judgment in Kansas because it might have convinced a court in another State to develop its law differently.

I do not believe the Court should engage in detailed evaluations of various States' laws. To the contrary, I believe our limited jurisdiction to review state-court judgments should foreclose such review.^[36] Accordingly, I trust that today's [845] decision is no more than a momentary aberration, and that the Court's opinion will not be read as a decision to constitutionalize novel state-court developments in the common law whenever a litigant can claim that another State connected to the litigation "most likely" would reach a different result. The Court long ago decided that state-court choices of law are unreviewable here absent demonstration of an unambiguous conflict in the established laws of connected States. See n. 15, supra. "To hold otherwise would render it possible to bring to this court every case wherein the defeated party claimed that the statute of another State had been construed to his detriment." Johnson v. New York Life Ins. Co., 187 U. S. 491, 496 (1903). Having ignored this admonition today, the Court may be forced to renew its turn-of-the-century efforts to convince the bar that state-court judgments based on fair evaluations of other States' laws are final.

Accordingly, while I join Parts I and II of the Court's opinion, I respectfully dissent from Part III and from the judgment.

[1] Briefs of amici curiae urging reversal were filed for the Legal Foundation of America by David Crump; and for Amoco Production Co. by Lucas A. Powe, Jr., R. H. Landt, and Glenn D. Young, Jr.

Alan B. Morrison and David C. Vladeck filed a brief for the Public Citizen as amicus curiae urging affirmance.

David B. Kahn filed a brief for the Consumer Coalition as amicus curiae.

[2] The holding in Hansberry, of course, was that petitioners in that case had not a sufficient common interest with the parties to a prior lawsuit such that a decree against those parties in the prior suit would bind the petitioners. But in the present case there is no question that the named plaintiffs adequately represent the class, and that all members of the class have the same interest in enforcing their claims against the defendant.

[3] Petitioner places emphasis on the fact that absent class members might be subject to discovery, counterclaims, cross-claims, or court costs. Petitioner cites no cases involving any such imposition upon plaintiffs, however. We are convinced that such burdens are rarely imposed upon plaintiff class members, and that the disposition of these issues is best left to a case which presents them in a more concrete way.

[4] Our holding today is limited to those class actions which seek to bind known plaintiffs concerning claims wholly or predominantly for money judgments. We intimate no view concerning other types of class actions, such as those seeking equitable relief. Nor, of course, does our discussion of personal jurisdiction address class actions where the jurisdiction is asserted against a defendant class.

[5] In this regard the Reporter for the 1966 amendments to the Federal Rules of Civil Procedure stated:

"[R]equiring the individuals affirmatively to request inclusion in the lawsuit would result in freezing out the claims of people — especially small claims held by small people — who for one reason or another, ignorance, timidity, unfamiliarity with business or legal matters, will simply not take the affirmative step." Kaplan, Continuing Work of the Civil Committee: 1966 Amendments of the Federal Rules of Civil Procedure (I), 81 Harv. L. Rev. 356, 397-398 (1967).

[6] The following statutes or procedural rules permit "opt out" notice in some types of class actions:

Fed. Rule Civ. Proc. 23(c)(2)(A); Ala. Rule Civ. Proc. 23(c)(2)(A); Alaska Rule Civ. Proc. 23(c)(2)(A); Ariz. Rule Civ. Proc. 23(c)(2)(A); Cal. Civ. Code Ann. § 1781(e)(1) (West 1973) (consumer class action); Colo. Rule Civ. Proc. 23(c)(2)(A); Del. Ch. Ct. Rule 23(c)(2)(A); D. C. Super. Ct. Rule Civ. Proc. 23(c)(2)(A); Fla. Rule Civ. Proc. 1.220(d)(2)(A); Idaho Rule Civ. Proc. 23(c)(2)(A); Ind. Rule Trial Proc. 23(C)(2)(A); Iowa Rule Civ. Proc. 42.8(b); Kan. Stat. Ann. § 60-223(c)(2) (1983); Ky. Rule Civ. Proc. 23.03(2)(a); Me. Rule Civ. Proc. 23(c)(2)(A); Md. Rule Civ. Proc. 2-231(e)(1); Mich. Ct. Rule 3.501(C)(5)(b); Minn. Rule Civ. Proc. 23.03 (2)(A); Mo. Rule Civ. Proc. 52.08; Mont. Rule Civ. Proc. 23(c)(2)(A); Nev. Rule Civ. Proc. 23(c)(2)(A); N. J. Civ. Prac. Rule 4:32-2; N. Y. Civ. Prac. Law § 904 (McKinney 1976); N. D. Rule Civ. Proc. 23(g)(2)(B); Ohio Rule Civ. Proc. 23(C)(2)(a); Okla. Stat., Tit. 12, § 2023(C)(2)(a) (Supp. 1984-1985); Ore. Rule Civ. Proc. 32F(1)(b)(ii); Pa. Rule Civ. Proc. 1711(a); Tenn. Rule Civ. Proc. 23.03(2)(a); Vt. Rule Civ. Proc. 23(c)(2)(A); Wash. Ct. Rule 23(C)(2)(i); Wyo. Rule Civ. Proc. 23(c)(2)(A).

OPINION 770_________________________________________________________________________________________________ No. royalty States No. leases Royalties to owners in state state leases in state_________________________________________________________________________________________________Oklahoma ............... 1,430 $ 471,122.53 2,684Texas................... 3,702 2,615,744.46 8,550Kansas.................. 4 115.10 504Arkansas................ 2 552.83 162Louisiana............... 26 516,248.13 361New Mexico.............. 591 194,799.95 469Illinois ............... 1 .01 353Wyloming................ 476 945,441.95 272Mississippi............. ____ ____ 36Utah.................... ____ ____ 18West Virginia........... ____ ____ 22No State Code........... ____ ____ 1,046 _____ __________ 6,232 $4,744,024.10

[7] The Commission approved petitioner's price increases in Opinion Nos. 699, 749 and 770. Petitioner reimbursed royalty owners $3.7, $2.9, and $4.7 million in suspended royalties, respectively. The States where the leases were located and their resident plaintiffs are as follows.

                              OPINION 699_________________________________________________________________________________________________                                                                            No. royalty      States          No. leases    Royalties to   owners                                in state     state leases  in state_________________________________________________________________________________________________Oklahoma ...............          1,266                  $   83,711.35           2,653Texas...................          4,414                     839,152.73           9,591Kansas..................              3                         152.88             496Arkansas................              6                       3,228.22             173Louisiana...............             68                   2,187,548.06           1,244New Mexico..............            941                     433,574.85             621Illinois ...............           ____                           ____             397Wyoming................             690                     148,906.93             413Mississippi.............           ____                           ____              67Utah....................           ____                           ____              29West Virginia...........           ____                           ____              20No State Code...........              1                          [.05]           1,025                                  _____                   ____________                                  7,389                  $3,696,274.97

                            OPINION 749_________________________________________________________________________________________________                                                                             No. royalty       States         No. leases     Royalties to   owners                                in state      state leases  in state_________________________________________________________________________________________________Oklahoma ...............         1,948                   $   243,163.49         3,591Texas...................         3,479                     2,171,217.36         7,881Kansas..................            15                         2,619.24           553Arkansas................            32                         1,769.33           171Louisiana...............           178                       352,539.45           740New Mexico..............           350                        22,670.27           339Illinois ...............             1                             1.30           357Wyloming................            68                        67,570.01            37Mississippi.............             3                           694.93            88Utah....................             1                           184.60            18West Virginia...........            32                        10,364.61           246No State Code...........             2                         1,032.59         1,553                                 ______                   _____________                                 6,109                    $2,873,827.18

[8] The Kansas interest rate also conflicts with the rate which is applicable in Louisiana. At the time this suit was filed that rate was 7%. See La. Civ. Code Ann., Art. 1938 (1977) (amended in 1982); Wurzlow v. Placid Oil Co., 279 So. 2d 749, 772-774 (La. App. 1973) (applying Art. 1938 to oil and gas royalties).

[9] In this case the Kansas Supreme Court held that "[t]he trial court did not determine whether any difference existed between the laws of Kansas and other states or whether another state's law should be applied." 235 Kan. 195, 221, 679 P. 2d 1159, 1180 (1984). Respondents contend that the trial court and the Supreme Court actually incorporated by reference the opinion in Shutts, Executor, 222 Kan. 527, 567 P. 2d 1292 (1977), where the court looked to the Texas and Oklahoma interest rate statutes and found them inapplicable. We do not think that the Kansas Supreme Court fully adopted the choice-of-law discussion in Shutts, Executor as its holding in this case. But even if we agreed that Shutts, Executor was somehow incorporated below, that would be insufficient. Shutts, Executor was a pre-Allstate case involving only 2 other States, rather than the 10 present here. Moreover, the gas region involved in Shutts, Executor was primarily within Kansas borders. Shutts, Executor only considered the conflict involving interest rate liability and state statutes, and in finding the 6% Texas rate inapplicable it cited but did not follow contrary Texas precedent. 222 Kan., at 562-565, 567 P. 2d, at 1317-1319.

[10] "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof." U. S. Const., Art. IV, § 1. See also 28 U. S. C. § 1738.

[11] "No State shall . . . deprive any person of life, liberty, or property, without due process of law . . . ." U. S. Const., Amdt. 14, § 1.

[12] The responsibilities of the Federal Power Commission were transferred to the Federal Energy Regulatory Commission in 1977. See 91 Stat. 578, 582-584.

[13]The relevant portion of the 1961 notice provided in full:

"Effective June 1, 1961, and until further notice, royalties paid you will be computed by excluding that portion of any price being collected subject to refund which exceeds 11 [cents] per Mcf (presently the maximum area price level for increased rates as recently announced by the Federal Power Commission in its Statement of General Policy). Payment of royalty based on the balance of the sums collected will be made at such time as it is determined that the sums collected are no longer subject to refund.

"Interest owners desiring to receive payments computed currently on the full sums being collected may arrange to do so by furnishing Phillips Petroleum Company acceptable indemnity to cover their proportionate part of any required refunds, plus the required interest." Shutts I, 222 Kan., at 534, 567 P. 2d, at 1299.

The practice of withholding suspense royalties pending final Commission price approval was sustained in Ashland Oil & Refining Co. v. Staats, Inc., 271 F. Supp. 571, 579 (Kan. 1967), and Boutte v. Chevron Oil Co., 316 F. Supp. 524 (ED La. 1970), aff'd, 442 F. 2d 1337 (CA5 1971) (per curiam).

[14] "Had Phillips put the `suspense royalties' into a common trust fund, separate from its operating funds, to be used solely to pay either the pipeline companies or the gas royalty owners once the FPC ultimately decided the rate increase question, this case would dovetail nicely into the `common fund' cases." Shutts I, 222 Kan., at 552, 567 P. 2d, at 1311. Accord, 235 Kan., at 201, 212, 679 P. 2d, at 1168, 1174. The Court criticizes Kansas' use of the "common fund" concept as applied to these funds. Ante, at 819-820. Kansas is not alone, however, in applying the common fund concept in a class action to a pool of readily identifiable moneys placed within the court's power by a liability determined by the lawsuit itself. See, e. g., Perlman v. First National Bank of Chicago, 15 Ill. App. 3d 784, 799-802, 305 N. E. 2d 236, 247-250 (1973) (cited in Shutts I, 222 Kan., at 553, 567 P. 2d, at 1311-1312); see also Sprague v. Ticonic National Bank, 307 U. S. 161, 166-167 (1939) (common fund may be "recovered" in litigation); Dawson, Lawyers and Involuntary Clients: Attorney Fees From Funds, 87 Harv. L. Rev. 1597, 1615 (1974) ("Funds can also be created by the litigation itself"). Moreover, it is of course no concern of this Court how Kansas chooses to develop its state common-law doctrines. Absent some constitutional foundation plainly lacking here, the Court's criticism of Kansas' substantive state law is entirely gratuitous.

[15] Phillips argued below that some distinction should be made for purposes of interest liability between royalties owed on gas sold to pipeline companies who paid the higher "suspense" price and royalties owned on gas used by Phillips itself rather than sold. Yet "Phillips acknowledges . . . that its obligation to pay royalties under the various . . . contracts exists without regard to the actual disposition of the gas." 235 Kan., at 215, 679 P. 2d, at 1177 (emphasis added). Thus, "[b]y choosing to withhold payment Phillips was allowed the use of the suspense monies during the suspense period which rightfully belonged to the royalty owners, and the royalty owners, in turn, were deprived of receiving and using those monies during that time." Id., at 216, 679 P. 2d, at 1177. Applying the same unjust enrichment theory developed in Shutts I, the Kansas Supreme Court accordingly rejected Phillips' proffered distinction. 235 Kan., at 217, 679 P. 2d, at 1178. Significantly, Phillips does not claim here that even a "putative" conflict of laws might turn on this distinction. Phillips pursues the argument only to contend in a footnote that, because it never actually collected higher prices on gas that it used itself, no "fund" actually existed. Brief for Petitioner 21, n. 18. As the Kansas court noted, however, the fund at issue is the "easily computed" amount of royalties that were due the royalty owners in any case, not the moneys collected by Phillips in return for sales. 235 Kan., at 217, 679 P. 2d, at 1178.

[16] Lightcap v. Mobil Oil Corp., 221 Kan. 448, 562 P. 2d 1, cert. denied, 434 U. S. 876 (1977); Shapiro v. Kansas Public Employees Retirement System, 216 Kan. 353, 357, 532 P. 2d 1081, 1084 (1975).

[17] The court cited six cases, four from the Fifth Circuit and two from the Northern District of Texas, in all of which Phillips was a named party.

[18] The Kansas court also pointed out that "the United States Supreme Court has noted the imposition of interest on refunds ordered by the FPC is not an inappropriate means of preventing unjust enrichment. (United Gas v. Callery Properties, 382 U. S. 223)." 222 Kan., at 562, 567 P. 2d, at 1317-1318.

[19] See Kan. Stat. Ann. § 16-201 (1974) ("Creditors shall be allowed to receive interest at the rate of six percent per annum, when no other rate of interest is agreed upon"); Okla. Stat., Tit. 15, § 266 (1971) ("The legal rate of interest shall be six per cent in the absence of any contract as to the rate of interest"); Tex. Rev. Civ. Stat. Ann., Art. 5069-1.03 (Vernon 1971) ("When no specified rate of interest is agreed upon by the parties, interest at the rate of 6% per annum shall be allowed") (all emphasis added).

[20] The court also held that interest accruing after the entry of judgment should be determined by Kansas' postjudgment interest statute. Kan. Stat. Ann. § 16-204 (1974). Phillips does not and could not contend that the Constitution bars a Kansas court from applying the Kansas postjudgment interest statute to judgments entered by Kansas courts. Such statutes demonstrate an irrefutable state interest in the force carried by judgments entered by a State's own courts. See also Klaxon Co. v. Stentor Electric Mfg. Co., 313 U. S. 487, 498 (1941) (State interest statutes concern "an incidental item of damages, interest, with respect to which courts at the forum have commonly been free to apply their own or some other law as they see fit").

[21] The court noted that the " `United States Rule' is also followed in Oklahoma and Texas," and that Phillips had "raised and lost" its contention of waiver in a similar case in Texas. 222 Kan., at 568, 567 P. 2d, at 1321, citing Phillips Petroleum Co. v. Riverview Gas Compression Co., 409 F. Supp. 486 (ND Tex. 1976). Moreover, because the relevant Oklahoma statute expressly stated that payment of a principal sum must be accepted "as such" to support a finding of waiver, Okla. Stat., Tit. 23, § 8 (1971), the statute was inapplicable here inasmuch as the royalty payments were not so accepted. 222 Kan., at 568, 567 P. 2d, at 1321.

[22] The only apparently new argument raised by Phillips in Shutts II was that it should not be liable for interest to a subclass of the affected royalty owners whose direct contractual agreement for royalties was with other producers who sold their gas to Phillips under a separate agreement. Although Phillips assumed the obligation to pay royalties directly to the royalty owners in these separate agreements, the separate agreements also stated that if a suspended price increase were ultimately approved by the Commission, Phillips would pay the other producers additional money "without interest." Phillips argued that this "without interest" clause barred interest to the royalty owners as well as to the other producers. The Kansas Supreme Court rejected this argument, however, because the royalty owners were not parties to the separate agreements and because no consideration was paid to the royalty owners by Phillips in return for this purported waiver of interest. 235 Kan., at 220, 679 P. 2d, at 1180. "[T]hese provisions, entered into between Phillips and the producers, cannot unilaterally deprive royalty owners of interest which they would otherwise be entitled to receive under casing head gas contracts in which the provisions do not appear." Ibid.

[23] See 28 U. S. C. § 1257: "Final judgments or decrees rendered by the highest court of a State . . . may be reviewed by the Supreme Court . . . (3) [b]y writ of certiorari . . . where any title, right, privilege or immunity is specially set up or claimed under the Constitution" (emphasis added).

[24] This principle was settled in a number of cases decided on either side of the turn of this century. See, e. g., Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U. S. 93, 96 (1917); Western Life Indemnity Co. v. Rupp, 235 U. S. 261, 275 (1914); Louisville & Nashville R. Co. v. Melton, 218 U. S. 36, 51, 52 (1910); Allen v. Alleghany Co., 196 U. S. 458, 464-465 (1905); Johnson v. New York Life Ins. Co., 187 U. S. 491, 496 (1903); Glenn v. Garth, 147 U. S. 360, 367-370 (1893).

[25] Cf. Guaranty Trust Co. v. New York, 326 U. S. 99, 109 (1945) (federal courts should apply state law in furtherance of the goal that "the outcome of the litigation in the federal court should be substantially the same . . . as it would be if tried in a State court").

[26] The Kansas court also stated that Kansas' statutory class-action requirements would "not be fulfilled" if "liability is to be determined according to varying and inconsistent state laws." 222 Kan., at 557, 567 P. 2d, at 1314. This belies any notion that the Kansas court plans to "boot-strap," ante, at 821, its choice-of-law decisions onto its assertion of jurisdiction over multistate actions; precisely the opposite is suggested.

[27] As I noted in Allstate, however, the litigant challenging a court's choice of law clearly "bears the burden of establishing" a constitutional infringement. 449 U. S., at 325, n. 13. "Prima facie every state is entitled to enforce in its own courts its own statutes . . . . One who challenges that right . . . assumes the burden of showing, upon some rational basis, that of the conflicting interests involved those of the foreign state are superior to those of the forum." Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532, 547 (1935). See Western Life Indemnity Co. v. Rupp, 235 U. S., at 275 ("It does not appear that the court's attention was called to any decision by the courts of Illinois placing a different construction, or indeed any construction, upon the section in question. If such decision existed, it was incumbent upon defendant to prove it"). Thus, if a litigant has failed to call a state court's attention to relevant law in other jurisdictions, it cannot raise that law here to create a constitutional issue.

[28] I noted in Allstate that choice of forum law might also violate the Due Process Clause in other ways, such as by irrationally favoring residents over nonresidents or representing a "dramatic departure from the rule that obtains in most American jurisdictions." 449 U. S., at 327. The first possibility is not applicable here; all royalty owners were treated exactly alike in the Kansas court's analysis. As for the second possibility, a "dramatic departure" must be distinguished from the application of general equitable principles to address new situations. Phillips may criticize Kansas' allegedly "unique notions of contract and oil and gas law," Brief for Petitioner 33, but such is not a constitutional objection. State courts, like this Court, constantly must apply and develop general legal principles to accommodate novel factual circumstances with the overarching goal of achieving a just result. Today's decision, for example, newly establishes lawful jurisdiction over a multistate plaintiffs' class action that Phillips likely could not have anticipated 15 years ago. Absent some demonstration of a departure from some clear rule obtaining in other States, an argument merely that "[n]o other state ever has hinted" at Kansas' result, id., at 32, is unavailing.

[29] " `[F]alse conflict' really means `no conflict of laws.' If the laws of both states relevant to the set of facts are the same, or would produce the same decision in the lawsuit, there is no real conflict between them." R. Leflar, American Conflicts Law § 93, p. 188 (3d ed. 1977). See also E. Scoles & P. Hay, Conflict of Laws § 2.6, p. 17 (1982) ("A `false conflict' exists when the potentially applicable laws do not differ"). The absence of any direct conflicts here distinguishes this case from decisions such as Home Ins. Co. v. Dick, 281 U. S. 397 (1930), and John Hancock Mutual Life Ins. Co. v. Yates, 299 U. S. 178 (1936), where the interstate legal conflicts were clear, conceded, and dispositive.

[30] In Shutts II the Kansas Supreme Court noted that "the legal issues presented are substantially the same" as in Shutts I, and that "[w]hile these issues are complex they were thoroughly reviewed in Shutts I." 235 Kan., at 211, 679 P. 2d, at 1174. The court then addressed the award and rate of interest as "damages to compensate the plaintiffs for the unjust enrichment derived by Phillips from the use of the plaintiffs' money," and concluded that "[i]n the instant case Phillips has not satisfactorily established why this court should not apply the rule enunciated in Shutts I" respecting this claim. Id., at 221, 679 P. 2d, at 1181. Two sentences later in the same paragraph, the court made the broad statement that its forum law should apply absent "compelling reason." The only fair reading of this statement in context is that the Kansas court in Shutts II adopted its multistate choice-of-law survey performed in Shutts I, and properly placed the burden on Phillips, see n. 18, supra, to show why the Shutts I conclusions should be reexamined. Even if this were ambiguous, this Court should give the Kansas Supreme Court the benefit of the doubt when reviewing its judgment. Thus, I frankly do not understand the Court's summary rejection of that court's attempt to incorporate Shutts I. Ante, at 822, n. 8. As for the implication in that same footnote that the choice-of-law discussion in Shutts I may have been erroneous on the merits, the statement that the Kansas court "did not follow contrary Texas precedent" (emphasis added), is simply wrong. See n. 22, infra.

[31] The Court provides a list of "putative conflicts" ante,at 816-818. The errors and omissions apparent in the Court's discussion demonstrate the dangers of relying on characterizations of state law provided by an interested party.

1. Although there technically may be "no recorded Oklahoma decision dealing with interest liability for suspended royalties," ante, at 816-817 (emphasis added), Oklahoma law expressly provides that the damages "caused by the breach of an obligation to pay money only is deemed to be the amount due by the terms of the obligation, with interest thereon." Okla. Stat., Tit. 23, § 22 (1981) (emphasis added); see also § 6 ("Any person who is entitled to recover damages certain, or capable of being made certain by calculation, . . . is entitled also to recover interest thereon"). The Oklahoma Supreme Court has specifically held that oil field royalty owners may sue as a class to recover royalties due them and may recover interest on the amount of recovery. West Edmond Hunton Line Unit v. Young, 325 P. 2d 1047 (1958).

2. No authority in the Court's string citation regarding Oklahoma's 6% statutory interest rate supports the statement that Oklahoma would "most likely" impose that rate in a suit such as this. Ante, at 817. The constitutional and statutory provisions merely provide that "in the absence of any contract" the rate is indeed 6%. Okla. Stat. Ann., Tit. 15, § 266 (1981). The cited judicial decisions merely hold that interest is recoverable on certain obligations, including royalties due to oil field royalty owners, without discussing applicable limitations on the rate.

After examining these Oklahoma authorities, the Kansas Supreme Court found the Oklahoma statutory rate, as well as that of Texas and Kansas, inapplicable by its own terms, because here Phillips had contractually agreed to the higher federal rate. 235 Kan., at 220-221, 679 P. 2d, at 1180; 222 Kan., at 563-565, 567 P. 2d, at 1318-1319. No reported Oklahoma decision contradicts this judgment, and the express terms of the Oklahoma statute permit it. See also McAnally v. Ideal Federal Credit Union, 428 P. 2d 322, 326 (Okla. 1967) (where federal law provides for interest in excess of 12% per year, that rate "must govern" over Oklahoma statutory rate).

3. The Kansas court similarly reviewed Texas' 6% interest statute and found that Phillips' contractual agreement to the FPC rate rendered the statute inapplicable. 235 Kan., at 220, 679 P. 2d, at 1180; 222 Kan., at 563-565, 567 P. 2d, at 1318-1319. It is true that Texas has not awarded suspense royalty interest at a rate higher than 6% — it is equally plain from the cited cases that no higher rate has been sought. Texas courts have, however, specifically permitted recovery at higher rates when a contract, even an implied or oral contract, evidences agreement to such rates. Preston Farm & Ranch Supply, Inc. v. Bio-Zyme Enterprises, 625 S. W. 2d 295 (Tex. 1981); Moody v. Main Bank of Houston, 667 S. W. 2d 613 (Tex. App. 1984).

4. While noting Phillips' reliance on an Oklahoma statute stating that "accepting payment of the whole principal, as such, waives all claim to interest," Okla. Stat. Ann., Tit. 23, § 8 (1981), the Court itself demonstrates that this statute's application here is open to question, by citing as "cf." Webster Drilling Co. v. Sterling Oil of Okla., Inc., 376 P. 2d 236, 238 (Okla. 1962). In that case, the Oklahoma Supreme Court held that when a right to interest is "based upon a contract, the interest has become `a substantive part of the debt itself,' " and Title 23, § 8, "is not applicable." Id., at 238 (citation omitted). The claim to interest upheld in Webster Drilling was based on an implied contract, exactly as the Kansas Supreme Court found in Shutts I. 222 Kan., at 562, 565, 567 P. 2d, at 1317, 1319. The Kansas Supreme Court explicitly considered Title 23, § 8, and relied on Webster Drilling to find it inapplicable. 222 Kan., at 568, 567 P. 2d, at 1321. It is therefore impossible to suggest, as the Court does, that the Kansas court "ignor[ed]" the Oklahoma statute. Ante, at 817.

5. Finally, the Court plainly misconstrues Texas law by suggesting that a mere "offer" to pay suspended royalties in return for an indemnity agreement would, by itself, excuse interest. In the federal decision cited by the Court, which mentions no Texas cases at the relevant pages, Phillips Petroleum Co. v. Riverside Gas Co., 409 F. Supp., at 495-496, indemnity agreements were actually entered into. Id., at 490. The Fifth Circuit case relied on for authority, which did cite Texas cases, states that an "unconditional offer to give up possession of a disputed fund" is necessary before a bar to interest is created. Phillips Petroleum Co. v. Adams, 513 F. 2d 355, 370 (1975) (emphasis added). The Texas Supreme Court has subsequently agreed that Adams correctly stated Texas law. Phillips Petroleum Co. v. Stahl Petroleum Co., 569 S. W. 2d 480, 487 (1978). See also Fuller v. Phillips Petroleum Co., 408 F. Supp. 643, 646 (ND Tex. 1976) (entering indemnity agreement terminates interest liability because Phillips "lost the reasonably free use of the money"). No indemnity agreements were entered into by the plaintiffs here, however, and as the Kansas Supreme Court found, Phillips' indemnity offer was not "unconditional" — to the contrary, it was "far more stringent than the corporate undertaking Phillips filed with the FPC." 222 Kan., at 567, 567 P. 2d, at 1320. It is also uncontested that Phillips continued to use freely the unpaid suspense royalties long after its "burdensome" conditions were not accepted by the royalty owners. Id., at 566, 567 P. 2d, at 1320. The Court errs drastically by relying on what one Federal District Court "appears" to have held to sustain a constitutional choice-of-law claim.

[32] The fact that the Kansas court rejected its own State's statute in favor of the uniform federal interest rate, to which it found Phillips had contractually agreed, demonstrates the absence of parochialism from its decision. There is absolutely no indication that Texas or Oklahoma courts would have decided differently had the same claim been presented there.

[33] Neither Phillips nor the Court contends that Kansas cannot constitutionally apply its own laws to the claims of Kansas residents, even though the leased land may lie in other States and no other apparent connection to Kansas may exist. Phillips has done business in Kansas throughout the years relevant to this litigation and it seems unarguable that application of Kansas law, or indeed the law of any of the 50 States where royalty owners reside, to the claims of at least some of the plaintiff class members was thus "perceived as possible" by Phillips "at the time of contracting." Allstate, 449 U. S., at 331, n. 24 (STEVENS, J., concurring in judgment); see id., at 316-318, and n. 22. It was also possible, of course, that any number of royalty owners might have moved to Kansas in the years Phillips held their suspense royalties, and that Kansas has a substantial interest in seeing its residents treated fairly when they invoke the jurisdiction of its courts. See Weinberg, Conflicts Cases and the Problem of Relevant Time, 10 Hofstra L. Rev. 1023, 1040-1043 (1982). Because Phillips must have anticipated application of Kansas law to some claims, the eventual geographic distribution of royalty owners' residences goes only to "likelihood" and not to fairness of the application of Kansas law. Allstate, 449 U. S., at 331, n. 24 (STEVENS, J., concurring in judgment). Additionally, it is easy enough for national firms like Phillips to make clear their expectations by placing express choice-of-law clauses in their contracts. See Allstate, 449 U. S., at 318, n. 24; id., at 324, 328 (STEVENS, J., concurring in judgment); Clay v. Sun Ins. Office, Ltd., 377 U. S. 179, 182 (1964). No such clauses are present here, however.

[34] See Allstate, 449 U. S., at 326 (STEVENS, J., concurring in judgment) (footnote omitted): "I question whether a judge's decision to apply the law of his own State could ever be described as wholly irrational. For judges are presumably familiar with their own state law and may find it difficult and time consuming to discover and apply correctly the law of another State. The forum State's interest in fair and efficient administration of justice is therefore sufficient, in my judgment, to attach a presumption of validity to a forum State's decision to apply its own law to a dispute over which it has jurisdiction."

[35] Accord, 3 H. Newberg, Newberg on Class Actions § 13.28, p. 63 (2d ed. 1985) ("the Kansas court in Shutts II may have committed only harmless error in applying its own law because there appears to be no significant conflict of laws among the states involved").

[36] The Court's decision in Allstatehas been criticized on the ground that there may well have been no true conflict of laws present, and, therefore, no need for extended constitutional discussion. See Weintraub, Who's Afraid of Constitutional Limitations on Choice of Law?, 10 Hofstra L. Rev. 17, 18-24 (1981). As I have demonstrated, the Court is once again open to this criticism.

Indeed, unless our review is restricted to cases in which conflicts are unambiguous, the Court will constantly run the risk of misconstruing the common law of any number of States. For example, the Kansas Supreme Court has already decided that Oklahoma would not apply its statutory interest rates where there is evidence of a contractual agreement to a different rate, and that such an agreement is present here. 235 Kan., at 220, 679 P. 2d, at 1180; 222 Kan., at 562-565, 567 P. 2d, at 1318-1319. Yet today the Court speculates that Oklahoma "would most likely apply" its statutory rates in this lawsuit. Ante, at 817. Since this Court has no more authority to resolve such issues of Oklahoma law than does the Kansas Supreme Court, however, the latter court remains free to abide by its former judgment.

[1435] Scott L. Nelson, Washington, DC, for petitioner.

Christopher Landau, Washington, DC, for respondent.

John S. Spadaro, John Sheehan Spadaro, LLC, Hockessin, DE, Scott L. Nelson, Counsel of Record, Brian Wolfman, Public [1436] Citizen Litigation Group, Washington, DC for petitioner.

Andrew T. Hahn, Sr., Seyfarth Shaw LLP, New York, NY, Christopher Landau, P.C., Counsel of Record, Britt C. Grant, Kirkland & Ellis LLP, Washington, DC, for respondent.

Justice SCALIA announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I and II-A, an opinion with respect to Parts II-B and II-D, in which THE CHIEF JUSTICE, Justice THOMAS, and Justice SOTOMAYOR join, and an opinion with respect to Part II-C, in which THE CHIEF JUSTICE and Justice THOMAS join.

New York law prohibits class actions in suits seeking penalties or statutory minimum damages.^[1] We consider whether this precludes a federal district court sitting in diversity from entertaining a class action under Federal Rule of Civil Procedure 23.^[2]

I

The petitioner's complaint alleged the following: Shady Grove Orthopedic Associates, P. A., provided medical care to Sonia E. Galvez for injuries she suffered in an automobile accident. As partial payment for that care, Galvez assigned to Shady Grove her rights to insurance benefits under a policy issued in New York by Allstate Insurance Co. Shady Grove tendered a claim for the assigned benefits to Allstate, which under New York law had 30 days to pay the claim or deny it. See N.Y. Ins. Law Ann. § 5106(a) (West 2009). Allstate apparently paid, but not on time, and it refused to pay the statutory interest that accrued on the overdue benefits (at two percent per month), see ibid.

Shady Grove filed this diversity suit in the Eastern District of New York to recover the unpaid statutory interest. Alleging that Allstate routinely refuses to pay interest on overdue benefits, Shady Grove [1437] sought relief on behalf of itself and a class of all others to whom Allstate owes interest. The District Court dismissed the suit for lack of jurisdiction. 466 F.Supp.2d 467 (2006). It reasoned that N.Y. Civ. Prac. Law Ann. § 901(b), which precludes a suit to recover a "penalty" from proceeding as a class action, applies in diversity suits in federal court, despite Federal Rule of Civil Procedure 23. Concluding that statutory interest is a "penalty" under New York law, it held that § 901(b) prohibited the proposed class action. And, since Shady Grove conceded that its individual claim (worth roughly $500) fell far short of the amount-in-controversy requirement for individual suits under 28 U.S.C. § 1332(a), the suit did not belong in federal court.^[3]

The Second Circuit affirmed. 549 F.3d 137 (2008). The court did not dispute that a federal rule adopted in compliance with the Rules Enabling Act, 28 U.S.C. § 2072, would control if it conflicted with § 901(b). But there was no conflict because (as we will describe in more detail below) the Second Circuit concluded that Rule 23 and § 901(b) address different issues. Finding no federal rule on point, the Court of Appeals held that § 901(b) is "substantive" within the meaning of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and thus must be applied by federal courts sitting in diversity.

We granted certiorari, ___ U.S. ___, 129 S.Ct. 2160, 173 L.Ed.2d 1155 (2009).

II

The framework for our decision is familiar. We must first determine whether Rule 23 answers the question in dispute. Burlington Northern R. Co. v. Woods, 480 U.S. 1, 4-5, 107 S.Ct. 967, 94 L.Ed.2d 1 (1987). If it does, it governs—New York's law notwithstanding—unless it exceeds statutory authorization or Congress's rulemaking power. Id. at 5, 107 S.Ct. 967; see Hanna v. Plumer, 380 U.S. 460, 463-464, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). We do not wade into Erie's murky waters unless the federal rule is inapplicable or invalid. See 380 U.S. at 469-471, 85 S.Ct. 1136.

A

The question in dispute is whether Shady Grove's suit may proceed as a class action. Rule 23 provides an answer. It states that "[a] class action may be maintained" if two conditions are met: The suit must satisfy the criteria set forth in subdivision (a) (i.e., numerosity, commonality, typicality, and adequacy of representation), and it also must fit into one of the three categories described in subdivision (b). Fed. Rule Civ. Proc. 23(b). By its terms this creates a categorical rule entitling a plaintiff whose suit meets the specified criteria to pursue his claim as a class action. (The Federal Rules regularly use "may" to confer categorical permission, see, e.g., Fed. Rules Civ. Proc. 8(d)(2)-(3), 14(a)(1), 18(a)-(b), 20(a)(1)-(2), 27(a)(1), 30(a)(1), as do federal statutes that establish procedural entitlements, see, e.g., 29 U.S.C. § 626(c)(1); 42 U.S.C. § 2000e-5(f)(1).) Thus, Rule 23 provides a one-size-fits-all formula for deciding the class-action question. Because § 901(b) attempts to answer the same question—i.e., it states that Shady Grove's suit "may not be maintained as a class action" (emphasis added) because of the relief it seeks—it cannot apply in diversity suits unless Rule 23 is ultra vires.

[1438] The Second Circuit believed that § 901(b) and Rule 23 do not conflict because they address different issues. Rule 23, it said, concerns only the criteria for determining whether a given class can and should be certified; section 901(b), on the other hand, addresses an antecedent question: whether the particular type of claim is eligible for class treatment in the first place—a question on which Rule 23 is silent. See 549 F.3d at 143-144. Allstate embraces this analysis. Brief for Respondent 12-13.

We disagree. To begin with, the line between eligibility and certifiability is entirely artificial. Both are preconditions for maintaining a class action. Allstate suggests that eligibility must depend on the "particular cause of action" asserted, instead of some other attribute of the suit, id. at 12. But that is not so. Congress could, for example, provide that only claims involving more than a certain number of plaintiffs are "eligible" for class treatment in federal court. In other words, relabeling Rule 23(a)'s prerequisites "eligibility criteria" would obviate Allstate's objection—a sure sign that its eligibility-certifiability distinction is made-to-order.

There is no reason, in any event, to read Rule 23 as addressing only whether claims made eligible for class treatment by some other law should be certified as class actions. Allstate asserts that Rule 23 neither explicitly nor implicitly empowers a federal court "to certify a class in each and every case" where the Rule's criteria are met. Id. at 13-14. But that is exactly what Rule 23 does: It says that if the prescribed preconditions are satisfied "[a] class action may be maintained" (emphasis added)—not "a class action may be permitted." Courts do not maintain actions; litigants do. The discretion suggested by Rule 23's "may" is discretion residing in the plaintiff: He may bring his claim in a class action if he wishes. And like the rest of the Federal Rules of Civil Procedure, Rule 23 automatically applies "in all civil actions and proceedings in the United States district courts," Fed. Rule Civ. Proc. 1. See Califano v. Yamasaki, 442 U.S. 682, 699-700, 99 S.Ct. 2545, 61 L.Ed.2d 176 (1979).

Allstate points out that Congress has carved out some federal claims from Rule 23's reach, see, e.g., 8 U.S.C. § 1252(e)(1)(B)—which shows, Allstate contends, that Rule 23 does not authorize class actions for all claims, but rather leaves room for laws like § 901(b). But Congress, unlike New York, has ultimate authority over the Federal Rules of Civil Procedure; it can create exceptions to an individual rule as it sees fit—either by directly amending the rule or by enacting a separate statute overriding it in certain instances. Cf. Henderson v. United States, 517 U.S. 654, 668, 116 S.Ct. 1638, 134 L.Ed.2d 880 (1996). The fact that Congress has created specific exceptions to Rule 23 hardly proves that the Rule does not apply generally. In fact, it proves the opposite. If Rule 23 did not authorize class actions across the board, the statutory exceptions would be unnecessary.

Allstate next suggests that the structure of § 901 shows that Rule 23 addresses only certifiability. Section 901(a), it notes, establishes class-certification criteria roughly analogous to those in Rule 23 (wherefore it agrees that subsection is preempted). But § 901(b)'s rule barring class actions for certain claims is set off as its own subsection, and where it applies § 901(a) does not. This shows, according to Allstate, that § 901(b) concerns a separate subject. Perhaps it does concern a subject separate from the subject of § 901(a). But the question before us is [1439] whether it concerns a subject separate from the subject of Rule 23—and for purposes of answering that question the way New York has structured its statute is immaterial. Rule 23 permits all class actions that meet its requirements, and a State cannot limit that permission by structuring one part of its statute to track Rule 23 and enacting another part that imposes additional requirements. Both of § 901's subsections undeniably answer the same question as Rule 23: whether a class action may proceed for a given suit. Cf. Burlington, 480 U.S. at 7-8, 107 S.Ct. 967.

The dissent argues that § 901(b) has nothing to do with whether Shady Grove may maintain its suit as a class action, but affects only the remedy it may obtain if it wins. See post at 1464-1469 (opinion of GINSBURG, J.). Whereas "Rule 23 governs procedural aspects of class litigation" by "prescrib[ing] the considerations relevant to class certification and postcertification proceedings," § 901(b) addresses only "the size of a monetary award a class plaintiff may pursue." Post at 1465-1466. Accordingly, the dissent says, Rule 23 and New York's law may coexist in peace.

We need not decide whether a state law that limits the remedies available in an existing class action would conflict with Rule 23; that is not what § 901(b) does. By its terms, the provision precludes a plaintiff from "maintain[ing]" a class action seeking statutory penalties. Unlike a law that sets a ceiling on damages (or puts other remedies out of reach) in properly filed class actions, § 901(b) says nothing about what remedies a court may award; it prevents the class actions it covers from coming into existence at all.^[4] Consequently, a court bound by § 901(b) could not certify a class action seeking both statutory penalties and other remedies even if it announces in advance that it will refuse to award the penalties in the event the plaintiffs prevail; to do so would violate the statute's clear prohibition on "maintain[ing]" such suits as class actions.

The dissent asserts that a plaintiff can avoid § 901(b)'s barrier by omitting from his complaint (or removing) a request for statutory penalties. See post at 1467-1468. Even assuming all statutory penalties are waivable,^[5] the fact that a complaint omitting them could be brought as a class action would not at all prove that § 901(b) is addressed only to remedies. If the state law instead banned class actions for fraud claims, a would-be class-action plaintiff could drop the fraud counts from his complaint and proceed with the remainder in a class action. Yet that would not mean the law provides no remedy for fraud; the ban would affect only the procedural means by which the remedy may be pursued. In short, although the dissent correctly abandons Allstate's eligibility-certifiability distinction, [1440] the alternative it offers fares no better.

The dissent all but admits that the literal terms of § 901(b) address the same subject as Rule 23—i.e., whether a class action may be maintained—but insists the provision's purpose is to restrict only remedies. See post at 1466-1468; post at 1467 ("[W]hile phrased as responsive to the question whether certain class actions may begin, § 901(b) is unmistakably aimed at controlling how those actions must end"). Unlike Rule 23, designed to further procedural fairness and efficiency, § 901(b) (we are told) "responds to an entirely different concern": the fear that allowing statutory damages to be awarded on a class-wide basis would "produce overkill." Post at 1466, 1464 (internal quotation marks omitted). The dissent reaches this conclusion on the basis of (1) constituent concern recorded in the law's bill jacket; (2) a commentary suggesting that the Legislature "apparently fear[ed]" that combining class actions and statutory penalties "could result in annihilating punishment of the defendant," V. Alexander, Practice Commentaries, C901:11, reprinted in 7B McKinney's Consolidated Laws of New York Ann., p. 104 (2006) (internal quotation marks omitted); (3) a remark by the Governor in his signing statement that § 901(b) "`provides a controlled remedy,'" post at 1464 (quoting Memorandum on Approving L. 1975, Ch. 207, reprinted in 1975 N.Y. Laws, at 1748; emphasis deleted), and (4) a state court's statement that the final text of § 901(b) "`was the result of a compromise among competing interests,'" post at 1464 (quoting Sperry v. Crompton Corp., 8 N.Y.3d 204, 211, 831 N.Y.S.2d 760, 863 N.E.2d 1012, 1015 (2007)).

This evidence of the New York Legislature's purpose is pretty sparse. But even accepting the dissent's account of the Legislature's objective at face value, it cannot override the statute's clear text. Even if its aim is to restrict the remedy a plaintiff can obtain, § 901(b) achieves that end by limiting a plaintiff's power to maintain a class action. The manner in which the law "could have been written," post at 1472, has no bearing; what matters is the law the Legislature did enact. We cannot rewrite that to reflect our perception of legislative purpose, see Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75, 79-80, 118 S.Ct. 998, 140 L.Ed.2d 201 (1998).^[6] The dissent's concern for state prerogatives is frustrated rather than furthered by revising state laws when a potential conflict with a Federal Rule arises; the statefriendly approach would be to accept the law as written and test the validity of the Federal Rule.

The dissent's approach of determining whether state and federal rules conflict based on the subjective intentions of the [1441] state legislature is an enterprise destined to produce "confusion worse confounded," Sibbach v. Wilson & Co., 312 U.S. 1, 14, 61 S.Ct. 422, 85 L.Ed. 479 (1941). It would mean, to begin with, that one State's statute could survive pre-emption (and accordingly affect the procedures in federal court) while another State's identical law would not, merely because its authors had different aspirations. It would also mean that district courts would have to discern, in every diversity case, the purpose behind any putatively pre-empted state procedural rule, even if its text squarely conflicts with federal law. That task will often prove arduous. Many laws further more than one aim, and the aim of others may be impossible to discern. Moreover, to the extent the dissent's purpose-driven approach depends on its characterization of § 901(b)'s aims as substantive, it would apply to many state rules ostensibly addressed to procedure. Pleading standards, for example, often embody policy preferences about the types of claims that should succeed—as do rules governing summary judgment, pretrial discovery, and the admissibility of certain evidence. Hard cases will abound. It is not even clear that a state supreme court's pronouncement of the law's purpose would settle the issue, since existence of the factual predicate for avoiding federal pre-emption is ultimately a federal question. Predictably, federal judges would be condemned to poring through state legislative history—which may be less easily obtained, less thorough, and less familiar than its federal counterpart, see R. Mersky & D. Dunn, Fundamentals of Legal Research 233 (8th ed.2002); Torres & Windsor, State Legislative Histories: A Select, Annotated Bibliography, 85 L. Lib. J. 545, 547 (1993).

But while the dissent does indeed artificially narrow the scope of § 901(b) by finding that it pursues only substantive policies, that is not the central difficulty of the dissent's position. The central difficulty is that even artificial narrowing cannot render § 901(b) compatible with Rule 23. Whatever the policies they pursue, they flatly contradict each other. Allstate asserts (and the dissent implies, see post at 1461, 1465-1466) that we can (and must) interpret Rule 23 in a manner that avoids overstepping its authorizing statute.^[7] If the Rule were susceptible of two meanings—one that would violate § 2072(b) and another that would not—we would agree. See Ortiz v. Fibreboard Corp., 527 U.S. 815, 842, 845, 119 S.Ct. 2295, 144 L.Ed.2d [1442] 715 (1999); cf. Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 503-504, 121 S.Ct. 1021, 149 L.Ed.2d 32 (2001). But it is not. Rule 23 unambiguously authorizes any plaintiff, in any federal civil proceeding, to maintain a class action if the Rule's prerequisites are met. We cannot contort its text, even to avert a collision with state law that might render it invalid. See Walker v. Armco Steel Corp., 446 U.S. 740, 750, n. 9, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980).^[8] What the dissent's approach achieves is not the avoiding of a "conflict between Rule 23 and § 901(b)," post at 1469, but rather the invalidation of Rule 23 (pursuant to § 2072(b) of the Rules Enabling Act) to the extent that it conflicts with the substantive policies of § 901. There is no other way to reach the dissent's destination. We must therefore confront head-on whether Rule 23 falls within the statutory authorization.

B

Erie involved the constitutional power of federal courts to supplant state law with judge-made rules. In that context, it made no difference whether the rule was technically one of substance or procedure; the touchstone was whether it "significantly affect[s] the result of a litigation." Guaranty Trust Co. v. York, 326 U.S. 99, 109, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945). That is not the test for either the constitutionality or the statutory validity of a Federal Rule of Procedure. Congress has undoubted power to supplant state law, and undoubted power to prescribe rules for the courts it has created, so long as those rules regulate matters "rationally capable of classification" as procedure. Hanna, 380 U.S. at 472, 85 S.Ct. 1136. In the Rules Enabling Act, Congress authorized this Court to promulgate rules of procedure subject to its review, 28 U.S.C. § 2072(a), but with the limitation that those rules "shall not abridge, enlarge or modify any substantive right," § 2072(b).

We have long held that this limitation means that the Rule must "really regulat[e] procedure,—the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for disregard or infraction of them," Sibbach, 312 U.S. at 14, 61 S.Ct. 422; see Hanna, supra at 464, 85 S.Ct. 1136; Burlington, 480 U.S. at 8, 107 S.Ct. 967. The test is not whether the rule affects a litigant's substantive rights; most procedural rules do. Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 445, 66 S.Ct. 242, 90 L.Ed. 185 (1946). What matters is what the rule itself regulates: If it governs only "the manner and the means" by which the litigants' rights are "enforced," it is valid; if it alters "the rules of decision by which [the] court will adjudicate [those] rights," it is not. Id. at 446, 66 S.Ct. 242 (internal quotation marks omitted).

Applying that test, we have rejected every statutory challenge to a Federal Rule that has come before us. We have found to be in compliance with § 2072(b) rules prescribing methods for serving process, see id. at 445-446, 66 S.Ct. 242 (Fed. Rule Civ. Proc. 4(f)); Hanna, supra at 463-465, 85 S.Ct. 1136 (Fed. Rule Civ. Proc. 4(d)(1)), and requiring litigants whose mental or physical condition is in dispute to submit to examinations, see Sibbach, supra at 14-16, 61 S.Ct. 422 (Fed. Rule Civ. Proc. 35); Schlagenhauf v. Holder, [1443] 379 U.S. 104, 113-114, 85 S.Ct. 234, 13 L.Ed.2d 152 (1964) (same). Likewise, we have upheld rules authorizing imposition of sanctions upon those who file frivolous appeals, see Burlington, supra at 8, 107 S.Ct. 967 (Fed. Rule App. Proc. 38), or who sign court papers without a reasonable inquiry into the facts asserted, see Business Guides, Inc. v. Chromatic Communications Enterprises, Inc., 498 U.S. 533, 551-554, 111 S.Ct. 922, 112 L.Ed.2d 1140 (1991) (Fed. Rule Civ. Proc. 11). Each of these rules had some practical effect on the parties' rights, but each undeniably regulated only the process for enforcing those rights; none altered the rights themselves, the available remedies, or the rules of decision by which the court adjudicated either.

Applying that criterion, we think it obvious that rules allowing multiple claims (and claims by or against multiple parties) to be litigated together are also valid. See, e.g., Fed. Rules Civ. Proc. 18 (joinder of claims), 20 (joinder of parties), 42(a) (consolidation of actions). Such rules neither change plaintiffs' separate entitlements to relief nor abridge defendants' rights; they alter only how the claims are processed. For the same reason, Rule 23—at least insofar as it allows willing plaintiffs to join their separate claims against the same defendants in a class action—falls within § 2072(b)'s authorization. A class action, no less than traditional joinder (of which it is a species), merely enables a federal court to adjudicate claims of multiple parties at once, instead of in separate suits. And like traditional joinder, it leaves the parties' legal rights and duties intact and the rules of decision unchanged.

Allstate contends that the authorization of class actions is not substantively neutral: Allowing Shady Grove to sue on behalf of a class "transform[s][the] dispute over a five hundred dollar penalty into a dispute over a five million dollar penalty." Brief for Respondent 1. Allstate's aggregate liability, however, does not depend on whether the suit proceeds as a class action. Each of the 1,000-plus members of the putative class could (as Allstate acknowledges) bring a freestanding suit asserting his individual claim. It is undoubtedly true that some plaintiffs who would not bring individual suits for the relatively small sums involved will choose to join a class action. That has no bearing, however, on Allstate's or the plaintiffs' legal rights. The likelihood that some (even many) plaintiffs will be induced to sue by the availability of a class action is just the sort of "incidental effec[t]" we have long held does not violate § 2072(b), Mississippi Publishing, supra at 445, 66 S.Ct. 242.

Allstate argues that Rule 23 violates § 2072(b) because the state law it displaces, § 901(b), creates a right that the Federal Rule abridges—namely, a "substantive right . . . not to be subjected to aggregated class-action liability" in a single suit. Brief for Respondent 31. To begin with, we doubt that that is so. Nothing in the text of § 901(b) (which is to be found in New York's procedural code) confines it to claims under New York law; and of course New York has no power to alter substantive rights and duties created by other sovereigns. As we have said, the consequence of excluding certain class actions may be to cap the damages a defendant can face in a single suit, but the law itself alters only procedure. In that respect, § 901(b) is no different from a state law forbidding simple joinder. As a fallback argument, Allstate argues that even if § 901(b) is a procedural provision, it was enacted "for substantive reasons," id. at 24 (emphasis added). Its end was not to improve "the conduct of the litigation process itself" but to alter "the outcome of that process." Id. at 26.

[1444] The fundamental difficulty with both these arguments is that the substantive nature of New York's law, or its substantive purpose, makes no difference. A Federal Rule of Procedure is not valid in some jurisdictions and invalid in others—or valid in some cases and invalid in others—depending upon whether its effect is to frustrate a state substantive law (or a state procedural law enacted for substantive purposes). That could not be clearer in Sibbach:

"The petitioner says the phrase [`substantive rights' in the Rules Enabling Act] connotes more; that by its use Congress intended that in regulating procedure this Court should not deal with important and substantial rights theretofore recognized. Recognized where and by whom? The state courts are divided as to the power in the absence of statute to order a physical examination. In a number such an order is authorized by statute or rule. . . ."

"The asserted right, moreover, is no more important than many others enjoyed by litigants in District Courts sitting in the several states before the Federal Rules of Civil Procedure altered and abolished old rights or privileges and created new ones in connection with the conduct of litigation. . . . If we were to adopt the suggested criterion of the importance of the alleged right we should invite endless litigation and confusion worse confounded. The test must be whether a rule really regulates procedure.. . ." 312 U.S. at 13-14, 61 S.Ct. 422 (footnotes omitted).

Hanna unmistakably expressed the same understanding that compliance of a Federal Rule with the Enabling Act is to be assessed by consulting the Rule itself, and not its effects in individual applications:

"[T]he court has been instructed to apply the Federal Rule, and can refuse to do so only if the Advisory Committee, this Court, and Congress erred in their prima facie judgment that the Rule in question transgresses neither the terms of the Enabling Act nor constitutional restrictions." 380 U.S. at 471, 85 S.Ct. 1136.

In sum, it is not the substantive or procedural nature or purpose of the affected state law that matters, but the substantive or procedural nature of the Federal Rule. We have held since Sibbach, and reaffirmed repeatedly, that the validity of a Federal Rule depends entirely upon whether it regulates procedure. See Sibbach, supra at 14, 61 S.Ct. 422; Hanna, supra at 464, 85 S.Ct. 1136; Burlington, 480 U.S. at 8, 107 S.Ct. 967. If it does, it is authorized by § 2072 and is valid in all jurisdictions, with respect to all claims, regardless of its incidental effect upon state-created rights.

C

A few words in response to the concurrence. We understand it to accept the framework we apply—which requires first, determining whether the federal and state rules can be reconciled (because they answer different questions), and second, if they cannot, determining whether the Federal Rule runs afoul of § 2072(b). Post at 1450-1452 (STEVENS, J., concurring in part and concurring in judgment). The concurrence agrees with us that Rule 23 and § 901(b) conflict, post at 1456-1457 and departs from us only with respect to the second part of the test, i.e., whether application of the Federal Rule violates § 2072(b), post at 1451-1455. Like us, it answers no, but for a reason different from ours. Post at 1457-1460.

The concurrence would decide this case on the basis, not that Rule 23 is procedural, but that the state law it displaces is procedural, in the sense that it does not [1445] "function as a part of the State's definition of substantive rights and remedies." Post at 1448. A state procedural rule is not preempted, according to the concurrence, so long as it is "so bound up with," or "sufficiently intertwined with," a substantive state-law right or remedy "that it defines the scope of that substantive right or remedy," post at 1448, 1455.

This analysis squarely conflicts with Sibbach, which established the rule we apply. The concurrence contends that Sibbach did not rule out its approach, but that is not so. Recognizing the impracticability of a test that turns on the idiosyncrasies of state law, Sibbach adopted and applied a rule with a single criterion: whether the Federal Rule "really regulates procedure." 312 U.S. at 14, 61 S.Ct. 422.^[9] That the concurrence's approach would have yielded the same result in Sibbach proves nothing; what matters is the rule we did apply, and that rule leaves no room for special exemptions based on the function or purpose of a particular state rule.^[10] We have rejected an attempt to read into Sibbach an exception with no basis in the opinion, see Schlagenhauf, 379 U.S. at 113-114, 85 S.Ct. 234, and we see no reason to find such an implied limitation today.

In reality, the concurrence seeks not to apply Sibbach, but to overrule it (or, what is the same, to rewrite it). Its approach, the concurrence insists, gives short shrift to the statutory text forbidding the Federal Rules from "abridg[ing], enlarg[ing], or modify[ing] any substantive right," § 2072(b). See post at 1452-1453. There is something to that. It is possible to understand how it can be determined whether a Federal Rule "enlarges" substantive rights without consulting State law: If the Rule creates a substantive right, even one that duplicates some statecreated rights, it establishes a new federal right. But it is hard to understand how it can be determined whether a Federal Rule [1446] "abridges" or "modifies" substantive rights without knowing what state-created rights would obtain if the Federal Rule did not exist. Sibbach's exclusive focus on the challenged Federal Rule—driven by the very real concern that Federal Rules which vary from State to State would be chaos, see 312 U.S. at 13-14, 61 S.Ct. 422—is hard to square with § 2072(b)'s terms.^[11]

Sibbach has been settled law, however, for nearly seven decades.^[12] Setting aside any precedent requires a "special justification" beyond a bare belief that it was wrong. Patterson v. McLean Credit Union, 491 U.S. 164, 172, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989) (internal quotation marks omitted). And a party seeking to overturn a statutory precedent bears an even greater burden, since Congress remains free to correct us, ibid., and adhering to our precedent enables it do so, see, e.g., Finley v. United States, 490 U.S. 545, 556, 109 S.Ct. 2003, 104 L.Ed.2d 593 (1989); 28 U.S.C. § 1367; Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 558, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005). We do Congress no service by presenting it a moving target. In all events, Allstate has not even asked us to overrule Sibbach, let alone carried its burden of persuading us to do so. Cf. IBP, Inc. v. Alvarez, 546 U.S. 21, 32, 126 S.Ct. 514, 163 L.Ed.2d 288 (2005). Why we should cast aside our decades-old decision escapes us, especially since (as the concurrence explains) that would not affect the result.^[13]

[1447] The concurrence also contends that applying Sibbach and assessing whether a Federal Rule regulates substance or procedure is not always easy. See post at 1454, n. 10. Undoubtedly some hard cases will arise (though we have managed to muddle through well enough in the 69 years since Sibbach was decided). But as the concurrence acknowledges, post at 1453-1454, the basic difficulty is unavoidable: The statute itself refers to "substantive right[s]," § 2072(b), so there is no escaping the substance-procedure distinction. What is more, the concurrence's approach does nothing to diminish the difficulty, but rather magnifies it many times over. Instead of a single hard question of whether a Federal Rule regulates substance or procedure, that approach will present hundreds of hard questions, forcing federal courts to assess the substantive or procedural character of countless state rules that may conflict with a single Federal Rule.^[14] And it still does not sidestep the problem it seeks to avoid. At the end of the day, one must come face to face with the decision whether or not the state policy (with which a putatively procedural state rule may be "bound up") pertains to a "substantive right or remedy," post at 1458—that is, whether it is substance or procedure.^[15] The more one explores the alternatives to Sibbach's rule, the more its wisdom becomes apparent.

D

We must acknowledge the reality that keeping the federal-court door open to class actions that cannot proceed in state court will produce forum shopping. That is unacceptable when it comes as the consequence of judge-made rules created to fill supposed "gaps" in positive federal law. See Hanna, 380 U.S. at 471-472, 85 S.Ct. 1136. For where neither the Constitution, a treaty, nor a statute provides the rule of decision or authorizes a federal court to supply one, "state law must govern because [1448] there can be no other law." Ibid.; see Clark, Erie's Constitutional Source, 95 Cal. L.Rev. 1289, 1302, 1311 (2007). But divergence from state law, with the attendant consequence of forum shopping, is the inevitable (indeed, one might say the intended) result of a uniform system of federal procedure. Congress itself has created the possibility that the same case may follow a different course if filed in federal instead of state court. Cf. Hanna, 380 U.S. at 472-473, 85 S.Ct. 1136. The short of the matter is that a Federal Rule governing procedure is valid whether or not it alters the outcome of the case in a way that induces forum shopping. To hold otherwise would be to "disembowel either the Constitution's grant of power over federal procedure" or Congress's exercise of it. Id. at 473-474, 85 S.Ct. 1136.

* * *

The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings.

It is so ordered.

Justice STEVENS, concurring in part and concurring in the judgment.

The New York law at issue, N.Y. Civ. Prac. Law Ann. (CPLR) § 901(b) (West 2006), is a procedural rule that is not part of New York's substantive law. Accordingly, I agree with Justice SCALIA that Federal Rule of Civil Procedure 23 must apply in this case and join Parts I and II-A of the Court's opinion. But I also agree with Justice GINSBURG that there are some state procedural rules that federal courts must apply in diversity cases because they function as a part of the State's definition of substantive rights and remedies.

I

It is a long-recognized principle that federal courts sitting in diversity "apply state substantive law and federal procedural law." Hanna v. Plumer, 380 U.S. 460, 465, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965).^[16] This principle is governed by a statutory framework, and the way that it is administered varies depending upon whether there is a federal rule addressed to the matter. See id. at 469-472, 85 S.Ct. 1136. If no federal rule applies, a federal court must follow the Rules of Decision Act, 28 U.S.C. § 1652, and make the "relatively unguided Erie choice,"^[17]Hanna, 380 U.S. at 471, 85 S.Ct. 1136, to determine whether the state law is the "rule of decision." But when a situation is covered by a federal rule, the Rules of Decision Act inquiry by its own terms does not apply. See § 1652; Hanna, 380 U.S. at 471, 85 S.Ct. 1136. Instead, the Rules Enabling Act (Enabling Act) controls. See 28 U.S.C. § 2072.

That does not mean, however, that the federal rule always governs. Congress has provided for a system of uniform federal rules, see ibid., under which federal courts sitting in diversity operate as "an independent system for administering justice to litigants who properly invoke its jurisdiction," Byrd v. Blue Ridge Rural Elec. Cooperative, Inc., 356 U.S. 525, 537, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958), and not [1449] as state-court clones that assume all aspects of state tribunals but are managed by Article III judges. See Hanna, 380 U.S. at 473-474, 85 S.Ct. 1136. But while Congress may have the constitutional power to prescribe procedural rules that interfere with state substantive law in any number of respects, that is not what Congress has done. Instead, it has provided in the Enabling Act that although "[t]he Supreme Court" may "prescribe general rules of practice and procedure," § 2072(a), those rules "shall not abridge, enlarge or modify any substantive right," § 2072(b). Therefore, "[w]hen a situation is covered by one of the Federal Rules,. . . the court has been instructed to apply the Federal Rule" unless doing so would violate the Act or the Constitution. Hanna, 380 U.S. at 471, 85 S.Ct. 1136.

Although the Enabling Act and the Rules of Decision Act "say, roughly, that federal courts are to apply state `substantive' law and federal `procedural' law," the inquiries are not the same. Ibid.; see also id. at 469-470, 85 S.Ct. 1136. The Enabling Act does not invite federal courts to engage in the "relatively unguided Erie choice," id. at 471, 85 S.Ct. 1136, but instead instructs only that federal rules cannot "abridge, enlarge or modify any substantive right," § 2072(b). The Enabling Act's limitation does not mean that federal rules cannot displace state policy judgments; it means only that federal rules cannot displace a State's definition of its own rights or remedies. See Sibbach v. Wilson & Co., 312 U.S. 1, 13-14, 61 S.Ct. 422, 85 L.Ed. 479 (1941) (reasoning that "the phrase `substantive rights'" embraces only those state rights that are sought to be enforced in the judicial proceedings).

Congress has thus struck a balance: "[H]ousekeeping rules for federal courts" will generally apply in diversity cases, notwithstanding that some federal rules "will inevitably differ" from state rules. Hanna, 380 U.S. at 473, 85 S.Ct. 1136. But not every federal "rul[e] of practice or procedure," § 2072(a), will displace state law. To the contrary, federal rules must be interpreted with some degree of "sensitivity to important state interests and regulatory policies," Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 427, n. 7, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996), and applied to diversity cases against the background of Congress' command that such rules not alter substantive rights and with consideration of "the degree to which the Rule makes the character and result of the federal litigation stray from the course it would follow in state courts," Hanna, 380 U.S. at 473, 85 S.Ct. 1136. This can be a tricky balance to implement.^[18]

It is important to observe that the balance Congress has struck turns, in part, on the nature of the state law that is being displaced by a federal rule. And in my view, the application of that balance does not necessarily turn on whether the state law at issue takes the form of what is traditionally described as substantive or procedural. Rather, it turns on whether the state law actually is part of a State's framework of substantive rights or remedies. See § 2072(b); cf. Hanna, 380 U.S. at 471, 85 S.Ct. 1136 ("The line between `substance' and `procedure' shifts as the legal context changes"); Guaranty Trust Co. v. York, 326 U.S. 99, 108, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945) (noting that the words "`substance'" and "`procedure'" "[e]ach impl[y] different variables depending [1450] upon the particular problem for which [they] are used").

Applying this balance, therefore, requires careful interpretation of the state and federal provisions at issue. "The line between procedural and substantive law is hazy," Erie R. Co. v. Tompkins, 304 U.S. 64, 92, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) (Reed, J., concurring), and matters of procedure and matters of substance are not "mutually exclusive categories with easily ascertainable contents," Sibbach, 312 U.S. at 17, 61 S.Ct. 422 (Frankfurter, J., dissenting). Rather, "[r]ules which lawyers call procedural do not always exhaust their effect by regulating procedure," Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 555, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), and in some situations, "procedure and substance are so interwoven that rational separation becomes well-nigh impossible," id. at 559, 69 S.Ct. 1221 (Rutledge, J., dissenting). A "state procedural rule, though undeniably `procedural' in the ordinary sense of the term," may exist "to influence substantive outcomes," S.A. Healy Co. v. Milwaukee Metropolitan Sewerage Dist., 60 F.3d 305, 310 (C.A.7 1995) (Posner, J.), and may in some instances become so bound up with the state-created right or remedy that it defines the scope of that substantive right or remedy. Such laws, for example, may be seemingly procedural rules that make it significantly more difficult to bring or to prove a claim, thus serving to limit the scope of that claim. See, e.g., Cohen, 337 U.S. at 555, 69 S.Ct. 1221 (state "procedure" that required plaintiffs to post bond before suing); Guaranty Trust Co., 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (state statute of limitations).^[19] Such "procedural rules" may also define the amount of recovery. See, e.g., Gasperini, 518 U.S. at 427, 116 S.Ct. 2211 (state procedure for examining jury verdicts as means of capping the available remedy); Moore § 124.07[3][a] (listing examples of federal courts' applying state laws that affect the amount of a judgment).

In our federalist system, Congress has not mandated that federal courts dictate to state legislatures the form that their substantive law must take. And were federal courts to ignore those portions of substantive state law that operate as procedural devices, it could in many instances limit the ways that sovereign States may define their rights and remedies. When a State chooses to use a traditionally procedural vehicle as a means of defining the scope of substantive rights or remedies, federal courts must recognize and respect that choice. Cf. Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530, 533, 69 S.Ct. 1233, 93 L.Ed. 1520 (1949) ("Since th[e] cause of action is created by local law, the measure of it is to be found only in local law . . . . Where local law qualifies or abridges it, the federal court must follow suit").

II

When both a federal rule and a state law appear to govern a question before a federal court sitting in diversity, our precedents have set out a two-step framework for federal courts to negotiate this thorny area. At both steps of the inquiry, there is a critical question about what the state law and the federal rule mean.

[1451] The court must first determine whether the scope of the federal rule is "`sufficiently broad'" to "`control the issue'" before the court, "thereby leaving no room for the operation" of seemingly conflicting state law. See Burlington Northern R. Co. v. Woods, 480 U.S. 1, 4-5, 107 S.Ct. 967, 94 L.Ed.2d 1 (1987); Walker v. Armco Steel Corp., 446 U.S. 740, 749-750, and n. 9, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980). If the federal rule does not apply or can operate alongside the state rule, then there is no "Ac[t] of Congress" governing that particular question, 28 U.S.C. § 1652, and the court must engage in the traditional Rules of Decision Act inquiry under Erie and its progeny. In some instances, the "plain meaning" of a federal rule will not come into "`direct collision'" with the state law, and both can operate. Walker, 446 U.S. at 750, n. 9, 749, 100 S.Ct. 1978. In other instances, the rule "when fairly construed," Burlington Northern R. Co., 480 U.S. at 4, 107 S.Ct. 967, with "sensitivity to important state interests and regulatory policies," Gasperini, 518 U.S. at 427, n. 7, 116 S.Ct. 2211, will not collide with the state law.^[20]

If, on the other hand, the federal rule is "sufficiently broad to control the issue before the Court," such that there is a "direct collision," Walker, 446 U.S. at 749-750, 100 S.Ct. 1978, the court must decide whether application of the federal rule "represents a valid exercise" of the "rulemaking authority . . . bestowed on this Court by the Rules Enabling Act." Burlington Northern R. Co., 480 U.S. at 5, 107 S.Ct. 967; see also Gasperini, 518 U.S. at 427, n. 7, 116 S.Ct. 2211; Hanna, 380 U.S. at 471-474, 85 S.Ct. 1136. That Act requires, inter alia, that federal rules "not abridge, enlarge or modify any substantive right." 28 U.S.C. § 2072(b) (emphasis added). Unlike Justice SCALIA, I believe that an application of a federal rule that effectively abridges, enlarges, or modifies a state-created right or remedy violates this command. Congress may have the constitutional power "to supplant state law" with rules that are "rationally capable of classification as procedure," ante at 1442 (internal quotation marks omitted), but we should generally presume that it has not done so. Cf. Wyeth v. Levine, 555 U.S. ___, ___, 129 S.Ct. 1187, 1194-95, 173 L.Ed.2d 51 (2009) (observing that "we start with the assumption" that a federal statute does not displace a State's law "unless that was the clear and manifest purpose of Congress" (internal quotation marks omitted)). Indeed, the mandate that federal rules "shall not abridge, enlarge or modify any substantive right" evinces the opposite intent, as does Congress' decision to delegate the creation of rules to this Court rather than to a political branch, see 19 Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice and Procedure § 4509, p. 265 (2d ed.1996) (hereinafter Wright).

[1452] Thus, the second step of the inquiry may well bleed back into the first. When a federal rule appears to abridge, enlarge, or modify a substantive right, federal courts must consider whether the rule can reasonably be interpreted to avoid that impermissible result. See, e.g., Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 503, 121 S.Ct. 1021, 149 L.Ed.2d 32 (2001) (avoiding an interpretation of Federal Rule of Civil Procedure 41(b) that "would arguably violate the jurisdictional limitation of the Rules Enabling Act" contained in § 2072(b)).^[21] And when such a "saving" construction is not possible and the rule would violate the Enabling Act, federal courts cannot apply the rule. See 28 U.S.C. § 2072(b) (mandating that federal rules "shall not" alter "any substantive right" (emphasis added)); Hanna, 380 U.S. at 473, 85 S.Ct. 1136 ("[A] court, in measuring a Federal Rule against the standards contained in the Enabling Act. . . need not wholly blind itself to the degree to which the Rule makes the character and result of the federal litigation stray from the course it would follow in state courts"); see also Semtek Int'l Inc., 531 U.S. at 503-504, 121 S.Ct. 1021 (noting that if state law granted a particular right, "the federal court's extinguishment of that right . . . would seem to violate [§ 2072(b)]"); cf. Statement of Justices Black and Douglas, 374 U.S. 865, 870 (1963) (observing that federal rules "as applied in given situations might have to be declared invalid"). A federal rule, therefore, cannot govern a particular case in which the rule would displace a state law that is procedural in the ordinary use of the term but is so intertwined with a state right or remedy that it functions to define the scope of the state-created right. And absent a governing federal rule, a federal court must engage in the traditional Rules of Decision Act inquiry, under the Erie line of cases. This application of the Enabling Act shows "sensitivity to important state interests," post at 1463, and "regulatory policies," post at 1460, but it does so as Congress authorized, by ensuring that federal rules that ordinarily "prescribe general rules of practice and procedure," § 2072(a), do "not abridge, enlarge or modify any substantive right," § 2072(b).

Justice SCALIA believes that the sole Enabling Act question is whether the federal rule "really regulates procedure," ante at 1442, 1444, 1445, 1446, n. 13 (plurality opinion) (internal quotation marks omitted), which means, apparently, whether it regulates "the manner and the means by which the litigants' rights are enforced," ante at 1442 (internal quotation marks omitted). I respectfully disagree.^[22] This interpretation of the Enabling Act is consonant with the Act's first limitation to "general rules of practice and procedure," § 2072(a). But it ignores the second limitation [1453] that such rules also "not abridge, enlarge or modify any substantive right," § 2072(b) (emphasis added),^[23] and in so doing ignores the balance that Congress struck between uniform rules of federal procedure and respect for a State's construction of its own rights and remedies. It also ignores the separation-of-powers presumption, see Wright § 4509, at 265, and federalism presumption, see Wyeth, 555 U.S., at ___, 129 S.Ct. at 1194-95, that counsel against judicially created rules displacing state substantive law.^[24]

Although the plurality appears to agree with much of my interpretation of § 2072, see ante at 1445-1446, it nonetheless rejects that approach for two reasons, both of which are mistaken. First, Justice SCALIA worries that if federal courts inquire into the effect of federal rules on state law, it will enmesh federal courts in difficult determinations about whether application [1454] of a given rule would displace a state determination about substantive rights. See ante at 1443-1444, 1447-1448, and nn. 14, 15. I do not see why an Enabling Act inquiry that looks to state law necessarily is more taxing than Justice SCALIA's.^[25] But in any event, that inquiry is what the Enabling Act requires: While it may not be easy to decide what is actually a "substantive right," "the designations substantive and procedural become important, for the Enabling Act has made them so." Ely 723; see also Wright § 4509, at 266. The question, therefore, is not what rule we think would be easiest on federal courts. The question is what rule Congress established. Although, Justice SCALIA may generally prefer easily administrable, bright-line rules, his preference does not give us license to adopt a second-best interpretation of the Rules Enabling Act. Courts cannot ignore text and context in the service of simplicity.

Second, the plurality argues that its interpretation of the Enabling Act is dictated by this Court's decision in Sibbach, which applied a Federal Rule about when parties must submit to medical examinations. But the plurality misreads that opinion. As Justice Harlan observed in Hanna, "shorthand formulations which have appeared in earlier opinions are prone to carry untoward results that frequently arise from oversimplification." 380 U.S. at 475, 85 S.Ct. 1136 (concurring opinion). To understand Sibbach, it is first necessary to understand the issue that was before the Court. The petitioner raised only the facial question whether "Rules 35 and 37 [of the Federal Rules of Civil Procedure] are . . . within the mandate of Congress to this court" and not the specific question of "the obligation of federal courts to apply the substantive law of a state."^[26] 312 U.S. at 9, 61 S.Ct. 422. The Court, therefore, had no occasion to consider whether the particular application of the Federal Rules in question would offend the Enabling Act.^[27]

[1455] Nor, in Sibbach, was any further analysis necessary to the resolution of the case because the matter at issue, requiring medical exams for litigants, did not pertain to "substantive rights" under the Enabling Act. Although most state rules bearing on the litigation process are adopted for some policy reason, few seemingly "procedural" rules define the scope of a substantive right or remedy. The matter at issue in Sibbach reflected competing federal and state judgments about privacy interests. Those privacy concerns may have been weighty and in some sense substantive; but they did not pertain to the scope of any state right or remedy at issue in the litigation. Thus, in response to the petitioner's argument in Sibbach that "substantive rights" include not only "rights sought to be adjudicated by the litigants" but also "general principle[s]" or "question[s] of public policy that the legislature is able to pass upon," id. at 2-3, 61 S.Ct. 422, we held that "the phrase `substantive rights'" embraces only state rights, such as the tort law in that case, that are sought to be enforced in the judicial proceedings. Id. at 13-14, 61 S.Ct. 422. If the Federal Rule had in fact displaced a state rule that was sufficiently intertwined with a state right or remedy, then perhaps the Enabling Act analysis would have been different.^[28] Our subsequent cases are not to the contrary.^[29]

III

Justice GINSBURG views the basic issue in this case as whether and how to [1456] apply a federal rule that dictates an answer to a traditionally procedural question (whether to join plaintiffs together as a class), when a state law that "defines the dimensions" of a state-created claim dictates the opposite answer. Post at 1458. As explained above, I readily acknowledge that if a federal rule displaces a state rule that is "`procedural' in the ordinary sense of the term," S.A. Healy Co., 60 F.3d at 310, but sufficiently interwoven with the scope of a substantive right or remedy, there would be an Enabling Act problem, and the federal rule would have to give way. In my view, however, this is not such a case.

Rule 23 Controls Class Certification

When the District Court in the case before us was asked to certify a class action, Federal Rule of Civil Procedure 23 squarely governed the determination whether the court should do so. That is the explicit function of Rule 23. Rule 23, therefore, must apply unless its application would abridge, enlarge, or modify New York rights or remedies.

Notwithstanding the plain language of Rule 23, I understand the dissent to find that Rule 23 does not govern the question of class certification in this matter because New York has made a substantive judgment that such a class should not be certified, as a means of proscribing damages. Although, as discussed infra at 1469-1471, I do not accept the dissent's view of § 901(b), I also do not see how the dissent's interpretation of Rule 23 follows from that view.^[30] I agree with JUSTICE GINSBURG that courts should "avoi[d] immoderate interpretations of the Federal Rules that would trench on state prerogatives," post at 1461-1462, and should in some instances "interpre[t] the federal rules to avoid conflict with important state regulatory policies," post at 1462 (internal quotation marks omitted). But that is not what the dissent has done. Simply because a rule should be read in light of federalism concerns, it does not follow that courts may rewrite the rule.

At bottom, the dissent's interpretation of Rule 23 seems to be that Rule 23 covers only those cases in which its application would create no Erie problem. The dissent would apply the Rules of Decision Act inquiry under Erie even to cases in which there is a governing federal rule, and thus the Act, by its own terms, does not apply. But "[w]hen a situation is covered by one of the Federal Rules, the question facing the court is a far cry from the typical, [1457] relatively unguided Erie choice." Hanna, 380 U.S. at 471, 85 S.Ct. 1136. The question is only whether the Enabling Act is satisfied. Although it reflects a laudable concern to protect "state regulatory policies," post at 1462 (internal quotation marks omitted), Justice GINSBURG's approach would, in my view, work an end run around Congress' system of uniform federal rules, see 28 U.S.C. § 2072, and our decision in Hanna. Federal courts can and should interpret federal rules with sensitivity to "state prerogatives," post at 1462; but even when "state interests . . . warrant our respectful consideration," post at 1464, federal courts cannot rewrite the rules. If my dissenting colleagues feel strongly that § 901(b) is substantive and that class certification should be denied, then they should argue within the Enabling Act's framework. Otherwise, "the Federal Rule applies regardless of contrary state law." Gasperini, 518 U.S. at 427, n. 7, 116 S.Ct. 2211; accord, Hanna, 380 U.S. at 471, 85 S.Ct. 1136.

Applying Rule 23 Does Not Violate the Enabling Act

As I have explained, in considering whether to certify a class action such as this one, a federal court must inquire whether doing so would abridge, enlarge, or modify New York's rights or remedies, and thereby violate the Enabling Act. This inquiry is not always a simple one because "[i]t is difficult to conceive of any rule of procedure that cannot have a significant effect on the outcome of a case," Wright § 4508, at 232-233, and almost "any rule can be said to have . . . `substantive effects,' affecting society's distribution of risks and rewards," Ely 724, n. 170. Faced with a federal rule that dictates an answer to a traditionally procedural question and that displaces a state rule, one can often argue that the state rule was really some part of the State's definition of its rights or remedies.

In my view, however, the bar for finding an Enabling Act problem is a high one. The mere fact that a state law is designed as a procedural rule suggests it reflects a judgment about how state courts ought to operate and not a judgment about the scope of state-created rights and remedies. And for the purposes of operating a federal court system, there are costs involved in attempting to discover the true nature of a state procedural rule and allowing such a rule to operate alongside a federal rule that appears to govern the same question. The mere possibility that a federal rule would alter a state-created right is not sufficient. There must be little doubt.

The text of CPLR § 901(b) expressly and unambiguously applies not only to claims based on New York law but also to claims based on federal law or the law of any other State. And there is no interpretation from New York courts to the contrary. It is therefore hard to see how § 901(b) could be understood as a rule that, though procedural in form, serves the function of defining New York's rights or remedies. This is all the more apparent because lawsuits under New York law could be joined in federal class actions well before New York passed § 901(b) in 1975, and New York had done nothing to prevent that. It is true, as the dissent points out, that there is a limited amount of legislative history that can be read to suggest that the New York officials who supported § 901(b) wished to create a "limitation" on New York's "statutory damages." Post at 1464. But, as Justice SCALIA notes, that is not the law that New York adopted.^[31] [1458] See ante at 1439-1440 (opinion of the Court).

The legislative history, moreover, does not clearly describe a judgment that § 901(b) would operate as a limitation on New York's statutory damages. In evaluating that legislative history, it is necessary to distinguish between procedural rules adopted for some policy reason and seemingly procedural rules that are intimately bound up in the scope of a substantive right or remedy. Although almost every rule is adopted for some reason and has some effect on the outcome of litigation, not every state rule "defines the dimensions of [a] claim itself," post at 1466. New York clearly crafted § 901(b) with the intent that only certain lawsuits—those for which there were not statutory penalties—could be joined in class actions in New York courts. That decision reflects a policy judgment about which lawsuits should proceed in New York courts in a class form and which should not. As Justice GINSBURG carefully outlines, see post at 1464-1465, § 901(b) was "apparently" adopted in response to fears that the class-action procedure, applied to statutory penalties, would lead to "annihilating punishment of the defendant." V. Alexander, Practice Commentaries, C901:11, reprinted in 7B McKinney's Consolidated Laws of New York Ann., p. 104 (2006) (internal quotation marks omitted); see also Sperry v. Crompton Corp., 8 N.Y.3d 204, 211, 831 N.Y.S.2d 760, 863 N.E.2d 1012, 1015 (2007). But statements such as these are not particularly strong evidence that § 901(b) serves to define who can obtain a statutory penalty or that certifying such a class would enlarge New York's remedy. Any device that makes litigation easier makes it easier for plaintiffs to recover damages.

In addition to the fear of excessive recoveries, some opponents of a broad class-action device "argued that there was no need to permit class actions in order to encourage litigation . . . when statutory penalties . . . provided an aggrieved party with a sufficient economic incentive to pursue a claim." Id., at 211, 831 N.Y.S.2d 760, 863 N.E.2d, at 1015 (emphasis added). But those opponents may have felt merely that, for any number of reasons, New York courts should not conduct trials in the class format when that format is unnecessary [1459] to motivate litigation.^[32] Justice GINSBURG asserts that this could not be true because "suits seeking statutory damages are arguably best suited to the class device because individual proof of actual damages is unnecessary." Post at 1464-1465. But some people believe that class actions are inefficient or at least unfair, insofar as they join together slightly disparate claims or force courts to adjudicate unwieldy lawsuits. It is not for us to dismiss the possibility that New York legislators shared in those beliefs and thus wanted to exclude the class vehicle when it appeared to be unnecessary.

The legislative history of § 901 thus reveals a classically procedural calibration of making it easier to litigate claims in New York courts (under any source of law) only when it is necessary to do so, and not making it too easy when the class tool is not required. This is the same sort of calculation that might go into setting filing fees or deadlines for briefs. There is of course a difference of degree between those examples and class certification, but not a difference of kind; the class vehicle may have a greater practical effect on who brings lawsuits than do low filing fees, but that does not transform it into a damages "proscription," post at 1466, n. 6, 1471, or "limitation," post at 1463, n. 2, 1464, 1464-1465, 1466, 1473.^[33]

The difference of degree is relevant to the forum shopping considerations that are part of the Rules of Decision Act or Erie inquiry. If the applicable federal rule did not govern the particular question at issue (or could be fairly read not to do so), then those considerations would matter, for precisely the reasons given by the dissent. See post at 1469-1473. But that is not this case. As the Court explained in Hanna, it is an "incorrect assumption that the rule of Erie R. Co. v. Tompkins constitutes the appropriate test of . . . the applicability of a Federal Rule of Civil Procedure." 380 U.S. at 469-470, 85 S.Ct. 1136. "It is true that both the Enabling Act and the Erie rule say, roughly, that federal courts are to apply state `substantive' law and federal `procedural' law," but the tests are different and reflect the fact that "they were designed to control very different sorts of decisions." Id. at 471, 85 S.Ct. 1136.

Because Rule 23 governs class certification, the only decision is whether certifying a class in this diversity case would "abridge, enlarge or modify" New York's substantive rights or remedies. § 2072(b). Although one can argue that class certification would enlarge New York's "limited" damages remedy, see post at 1463, n. 2, 1464, 1464-1465, 1466, 1473, such arguments rest on extensive speculation about what the New York Legislature had in mind when it created § 901(b). But given that there are two plausible competing narratives, it seems obvious to me that we [1460] should respect the plain textual reading of § 901(b), a rule in New York's procedural code about when to certify class actions brought under any source of law, and respect Congress' decision that Rule 23 governs class certification in federal courts. In order to displace a federal rule, there must be more than just a possibility that the state rule is different than it appears.

Accordingly, I concur in part and concur in the judgment.

Justice GINSBURG, with whom Justice KENNEDY, Justice BREYER, and Justice ALITO join, dissenting.

The Court today approves Shady Grove's attempt to transform a $500 case into a $5,000,000 award, although the State creating the right to recover has proscribed this alchemy. If Shady Grove had filed suit in New York state court, the 2% interest payment authorized by New York Ins. Law Ann. § 5106(a) (West 2009) as a penalty for overdue benefits would, by Shady Grove's own measure, amount to no more than $500. By instead filing in federal court based on the parties' diverse citizenship and requesting class certification, Shady Grove hopes to recover, for the class, statutory damages of more than $5,000,000. The New York Legislature has barred this remedy, instructing that, unless specifically permitted, "an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action." N.Y. Civ. Prac. Law Ann. (CPLR) § 901(b) (West 2006). The Court nevertheless holds that Federal Rule of Civil Procedure 23, which prescribes procedures for the conduct of class actions in federal courts, preempts the application of § 901(b) in diversity suits.

The Court reads Rule 23 relentlessly to override New York's restriction on the availability of statutory damages. Our decisions, however, caution us to ask, before undermining state legislation: Is this conflict really necessary? Cf. Traynor, Is This Conflict Really Necessary? 37 Tex. L.Rev. 657 (1959). Had the Court engaged in that inquiry, it would not have read Rule 23 to collide with New York's legitimate interest in keeping certain monetary awards reasonably bounded. I would continue to interpret Federal Rules with awareness of, and sensitivity to, important state regulatory policies. Because today's judgment radically departs from that course, I dissent.

I

A

"Under the Erie doctrine," it is long settled, "federal courts sitting in diversity apply state substantive law and federal procedural law." Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 427, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996); see Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Justice Harlan aptly conveyed the importance of the doctrine; he described Erie as "one of the modern cornerstones of our federalism, expressing policies that profoundly touch the allocation of judicial power between the state and federal systems." Hanna v. Plumer, 380 U.S. 460, 474, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965) (concurring opinion). Although we have found Erie's application "sometimes [to be] a challenging endeavor," Gasperini, 518 U.S. at 427, 116 S.Ct. 2211, two federal statutes mark our way.

The first, the Rules of Decision Act,^[34] prohibits federal courts from generating [1461] substantive law in diversity actions. See Erie, 304 U.S. at 78, 58 S.Ct. 817. Originally enacted as part of the Judiciary Act of 1789, this restraint serves a policy of prime importance to our federal system. We have therefore applied the Act "with an eye alert to ... avoiding disregard of State law." Guaranty Trust Co. v. York, 326 U.S. 99, 110, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945).

The second, the Rules Enabling Act, enacted in 1934, authorizes us to "prescribe general rules of practice and procedure" for the federal courts, but with a crucial restriction: "Such rules shall not abridge, enlarge or modify any substantive right." 28 U.S.C. § 2072. Pursuant to this statute, we have adopted the Federal Rules of Civil Procedure. In interpreting the scope of the Rules, including, in particular, Rule 23, we have been mindful of the limits on our authority. See, e.g., Ortiz v. Fibreboard Corp., 527 U.S. 815, 845, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999) (The Rules Enabling Act counsels against "adventurous application" of Rule 23; any tension with the Act "is best kept within tolerable limits."); Amchem Products, Inc. v. Windsor, 521 U.S. 591, 612-613, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997). See also Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 503-504, 121 S.Ct. 1021, 149 L.Ed.2d 32 (2001).

If a Federal Rule controls an issue and directly conflicts with state law, the Rule, so long as it is consonant with the Rules Enabling Act, applies in diversity suits. See Hanna, 380 U.S. at 469-474, 85 S.Ct. 1136. If, however, no Federal Rule or statute governs the issue, the Rules of Decision Act, as interpreted in Erie, controls. That Act directs federal courts, in diversity cases, to apply state law when failure to do so would invite forum-shopping and yield markedly disparate litigation outcomes. See Gasperini, 518 U.S. at 428, 116 S.Ct. 2211; Hanna, 380 U.S. at 468, 85 S.Ct. 1136. Recognizing that the Rules of Decision Act and the Rules Enabling Act simultaneously frame and inform the Erie analysis, we have endeavored in diversity suits to remain safely within the bounds of both congressional directives.

B

In our prior decisions in point, many of them not mentioned in the Court's opinion, we have avoided immoderate interpretations of the Federal Rules that would trench on state prerogatives without serving any countervailing federal interest. "Application of the Hanna analysis," we have said, "is premised on a `direct collision' between the Federal Rule and the state law." Walker v. Armco Steel Corp., 446 U.S. 740, 749-750, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980) (quoting Hanna, 380 U.S. at 472, 85 S.Ct. 1136). To displace state law, a Federal Rule, "when fairly construed," must be "`sufficiently broad'" so as "to `control the issue' before the court, thereby leaving no room for the operation of that law." Burlington Northern R. Co. v. Woods, 480 U.S. 1, 4-5, 107 S.Ct. 967, 94 L.Ed.2d 1 (1987) (quoting Walker, 446 U.S. at 749-750, and n. 9, 100 S.Ct. 1978; emphasis added); cf. Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 37-38, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988) (SCALIA, J., dissenting) ("[I]n deciding whether a federal ... Rule of Procedure encompasses a particular issue, a broad reading that would create significant disuniformity between state and federal courts should be avoided if the text permits.").

[1462] In pre-Hanna decisions, the Court vigilantly read the Federal Rules to avoid conflict with state laws. In Palmer v. Hoffman, 318 U.S. 109, 117, 63 S.Ct. 477, 87 L.Ed. 645 (1943), for example, the Court read Federal Rule 8(c), which lists affirmative defenses, to control only the manner of pleading the listed defenses in diversity cases; as to the burden of proof in such cases, Palmer held, state law controls.

Six years later, in Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530, 69 S.Ct. 1233, 93 L.Ed. 1520 (1949), the Court ruled that state law determines when a diversity suit commences for purposes of tolling the state limitations period. Although Federal Rule 3 specified that "[a] civil action is commenced by filing a complaint with the court," we held that the Rule did not displace a state law that tied an action's commencement to service of the summons. Id. at 531-533, 69 S.Ct. 1233. The "cause of action [wa]s created by local law," the Court explained, therefore "the measure of it [wa]s to be found only in local law." Id. at 533, 69 S.Ct. 1233.

Similarly in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), the Court held applicable in a diversity action a state statute requiring plaintiffs, as a prerequisite to pursuit of a stockholder's derivative action, to post a bond as security for costs. At the time of the litigation, Rule 23, now Rule 23.1, addressed a plaintiff's institution of a derivative action in federal court. Although the Federal Rule specified prerequisites to a stockholder's maintenance of a derivative action, the Court found no conflict between the Rule and the state statute in question; the requirements of both could be enforced, the Court observed. See id., at 556, 69 S.Ct. 1221. Burdensome as the security-for-costs requirement may be, Cohen made plain, suitors could not escape the upfront outlay by resorting to the federal court's diversity jurisdiction.

In all of these cases, the Court stated in Hanna, "the scope of the Federal Rule was not as broad as the losing party urged, and therefore, there being no Federal Rule which covered the point in dispute, Erie commanded the enforcement of state law." 380 U.S. at 470, 85 S.Ct. 1136. In Hanna itself, the Court found the clash "unavoidable," ibid.; the petitioner had effected service of process as prescribed by Federal Rule 4(d)(1), but that "how-to" method did not satisfy the special Massachusetts law applicable to service on an executor or administrator. Even as it rejected the Massachusetts prescription in favor of the federal procedure, however, "[t]he majority in Hanna recognized ... that federal rules ... must be interpreted by the courts applying them, and that the process of interpretation can and should reflect an awareness of legitimate state interests." R. Fallon, J. Manning, D. Meltzer, & D. Shapiro, Hart and Wechsler's The Federal Courts and the Federal System 593 (6th ed.2009) (hereinafter Hart & Wechsler).

Following Hanna, we continued to "interpre[t] the federal rules to avoid conflict with important state regulatory policies." Hart & Wechsler 593. In Walker, the Court took up the question whether Ragan should be overruled; we held, once again, that Federal Rule 3 does not directly conflict with state rules governing the time when an action commences for purposes of tolling a limitations period. 446 U.S. at 749-752, 100 S.Ct. 1978. Rule 3, we said, addresses only "the date from which various timing requirements of the Federal Rules begin to run," id. at 751, 100 S.Ct. 1978, and does not "purpor[t] to displace state tolling rules," id. at 750-751, 100 S.Ct. 1978. Significant state policy interests would be frustrated, we observed, [1463] were we to read Rule 3 as superseding the state rule, which required actual service on the defendant to stop the clock on the statute of limitations. Id. at 750-752, 100 S.Ct. 1978.

We were similarly attentive to a State's regulatory policy in Gasperini. That diversity case concerned the standard for determining when the large size of a jury verdict warrants a new trial. Federal and state courts alike had generally employed a "shock the conscience" test in reviewing jury awards for excessiveness. See 518 U.S. at 422, 116 S.Ct. 2211. Federal courts did so pursuant to Federal Rule 59(a) which, as worded at the time of Gasperini, instructed that a trial court could grant a new trial "for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States." Fed. Rule Civ. Proc. 59(a) (West 1995). In an effort to provide greater control, New York prescribed procedures under which jury verdicts would be examined to determine whether they "deviate[d] materially from what would be reasonable compensation." See Gasperini, 518 U.S. at 423-425, 116 S.Ct. 2211 (quoting CPLR § 5501(c)). This Court held that Rule 59(a) did not inhibit federal-court accommodation of New York's invigorated test.

Most recently, in Semtek, we addressed the claim-preclusive effect of a federal-court judgment dismissing a diversity action on the basis of a California statute of limitations. The case came to us after the same plaintiff renewed the same fray against the same defendant in a Maryland state court. (Plaintiff chose Maryland because that State's limitations period had not yet run.) We held that Federal Rule 41(b), which provided that an involuntary dismissal "operate[d] as an adjudication on the merits," did not bar maintenance of the renewed action in Maryland. To hold that Rule 41(b) precluded the Maryland courts from entertaining the case, we said, "would arguably violate the jurisdictional limitation of the Rules Enabling Act," 531 U.S. at 503, 121 S.Ct. 1021, and "would in many cases violate [Erie's] federalism principle," id. at 504, 121 S.Ct. 1021.

In sum, both before and after Hanna, the above-described decisions show, federal courts have been cautioned by this Court to "interpre[t] the Federal Rules... with sensitivity to important state interests," Gasperini, 518 U.S. at 427, n. 7, 116 S.Ct. 2211, and a will "to avoid conflict with important state regulatory policies," id. at 438, n. 22, 116 S.Ct. 2211 (internal quotation marks omitted).^[35] The Court [1464] veers away from that approach—and conspicuously, its most recent reiteration in Gasperini, ante at 1441, n. 7—in favor of a mechanical reading of Federal Rules, insensitive to state interests and productive of discord.

C

Our decisions instruct over and over again that, in the adjudication of diversity cases, state interests—whether advanced in a statute, e.g., Cohen, or a procedural rule, e.g., Gasperini—warrant our respectful consideration. Yet today, the Court gives no quarter to New York's limitation on statutory damages and requires the lower courts to thwart the regulatory policy at stake: To prevent excessive damages, New York's law controls the penalty to which a defendant may be exposed in a single suit. The story behind § 901(b)'s enactment deserves telling.

In 1975, the Judicial Conference of the State of New York proposed a new class-action statute designed "to set up a flexible, functional scheme" that would provide "an effective, but controlled group remedy." Judicial Conference Report on CPLR, reprinted in 1975 N.Y. Laws pp. 1477, 1493 (McKinney). As originally drafted, the legislation addressed only the procedural aspects of class actions; it specified, for example, five prerequisites for certification, eventually codified at § 901(a), that closely tracked those listed in Rule 23. See CPLR § 901(a) (requiring, for class certification, numerosity, predominance, typicality, adequacy of representation, and superiority).

While the Judicial Conference proposal was in the New York Legislature's hopper, "various groups advocated for the addition of a provision that would prohibit class action plaintiffs from being awarded a statutorily-created penalty ... except when expressly authorized in the pertinent statute." Sperry v. Crompton Corp., 8 N.Y.3d 204, 211, 831 N.Y.S.2d 760, 863 N.E.2d 1012, 1015 (2007). These constituents "feared that recoveries beyond actual damages could lead to excessively harsh results." Ibid. "They also argued that there was no need to permit class actions ... [because] statutory penalties ... provided an aggrieved party with a sufficient economic incentive to pursue a claim." Ibid. Such penalties, constituents observed, often far exceed a plaintiff's actual damages. "When lumped together," they argued, "penalties and class actions produce overkill." Attachment to Letter from G. Perkinson, New York State Council of Retail Merchants, Inc., to J. Gribetz, Executive Chamber (June 4, 1975) (Legislative Report), Bill Jacket, L. 1975, Ch. 207.

Aiming to avoid "annihilating punishment of the defendant," the New York Legislature amended the proposed statute to bar the recovery of statutory damages in class actions. V. Alexander, Practice Commentaries, C901:11, reprinted in 7B McKinney's Consolidated Laws of New York Ann., p. 104 (2006) (internal quotation marks omitted). In his signing statement, Governor Hugh Carey stated that the new statute "empowers the court to prevent abuse of the class action device and provides a controlled remedy." Memorandum on Approving L. 1975, Ch. 207, reprinted in 1975 N.Y. Laws, at 1748 (emphasis added).

"[T]he final bill ... was the result of a compromise among competing interests." Sperry, 8 N.Y.3d at 211, 831 N.Y.S.2d 760, 863 N.E.2d at 1015. Section 901(a) allows [1465] courts leeway in deciding whether to certify a class, but § 901(b) rejects the use of the class mechanism to pursue the particular remedy of statutory damages. The limitation was not designed with the fair conduct or efficiency of litigation in mind. Indeed, suits seeking statutory damages are arguably best suited to the class device because individual proof of actual damages is unnecessary. New York's decision instead to block class-action proceedings for statutory damages therefore makes scant sense, except as a means to a manifestly substantive end: Limiting a defendant's liability in a single lawsuit in order to prevent the exorbitant inflation of penalties—remedies the New York Legislature created with individual suits in mind.^[36]

D

Shady Grove contends—and the Court today agrees—that Rule 23 unavoidably preempts New York's prohibition on the recovery of statutory damages in class actions. The Federal Rule, the Court emphasizes, states that Shady Grove's suit "may be" maintained as a class action, which conflicts with § 901(b)'s instruction that it "may not" so proceed. Ante at 1437 (internal quotation marks omitted and emphasis deleted). Accordingly, the Court insists, § 901(b) "cannot apply in diversity suits unless Rule 23 is ultra vires." Ibid. Concluding that Rule 23 does not violate the Rules Enabling Act, the Court holds that the federal provision controls Shady Grove's ability to seek, on behalf of a class, a statutory penalty of over $5,000,000. Ante at 1442-1444 (plurality opinion); ante at 1457-1460 (STEVENS, J., concurring in part and concurring in judgment).

The Court, I am convinced, finds conflict where none is necessary. Mindful of the history behind § 901(b)'s enactment, the thrust of our precedent, and the substantive-rights limitation in the Rules Enabling Act, I conclude, as did the Second Circuit and every District Court to have considered the question in any detail,^[37] that Rule 23 does not collide with § 901(b). As the Second Circuit well understood, Rule 23 prescribes the considerations relevant to class certification and postcertification proceedings—but it does not command that a particular remedy be available when a party sues in a representative capacity. See 549 F.3d 137, 143 (2008).^[38] Section 901(b), [1466] in contrast, trains on that latter issue. Sensibly read, Rule 23 governs procedural aspects of class litigation, but allows state law to control the size of a monetary award a class plaintiff may pursue.

In other words, Rule 23 describes a method of enforcing a claim for relief, while § 901(b) defines the dimensions of the claim itself. In this regard, it is immaterial that § 901(b) bars statutory penalties in wholesale, rather than retail, fashion. The New York Legislature could have embedded the limitation in every provision creating a cause of action for which a penalty is authorized; § 901(b) operates as shorthand to the same effect. It is as much a part of the delineation of the claim for relief as it would be were it included claim by claim in the New York Code.

The Court single-mindedly focuses on whether a suit "may" or "may not" be maintained as a class action. See ante at 1437-1439. Putting the question that way, the Court does not home in on the reason why. Rule 23 authorizes class treatment for suits satisfying its prerequisites because the class mechanism generally affords a fair and efficient way to aggregate claims for adjudication. Section 901(b) responds to an entirely different concern; it does not allow class members to recover statutory damages because the New York Legislature considered the result of adjudicating such claims en masse to be exorbitant.^[39] The fair and efficient conduct of class litigation is the legitimate concern of Rule 23; the remedy for an infraction of state law, however, is the legitimate concern of the State's lawmakers and not of the federal rulemakers. Cf. Ely, The Irrepressible Myth of Erie, 87 Harv. L.Rev. 693, 722 (1974) (It is relevant "whether the state provision embodies a substantive policy or represents only a procedural disagreement with the federal rulemakers respecting the fairest and most efficient way of conducting litigation.").

Suppose, for example, that a State, wishing to cap damages in class actions at $1,000,000, enacted a statute providing that "a suit to recover more than $1,000,000 may not be maintained as a class action." Under the Court's reasoning—which attributes dispositive significance to the words "may not be maintained"—Rule 23 would preempt this provision, nevermind that Congress, by authorizing the promulgation of rules of procedure for federal courts, surely did not intend to displace state-created ceilings on damages.^[40] The Court suggests [1467] that the analysis might differ if the statute "limit[ed] the remedies available in an existing class action," ante at 1439, such that Rule 23 might not conflict with a state statute prescribing that "no more than $1,000,000 may be recovered in a class action." There is no real difference in the purpose and intended effect of these two hypothetical statutes. The notion that one directly impinges on Rule 23's domain, while the other does not, fundamentally misperceives the office of Rule 23.^[41]

The absence of an inevitable collision between Rule 23 and § 901(b) becomes evident once it is comprehended that a federal court sitting in diversity can accord due respect to both state and federal prescriptions. Plaintiffs seeking to vindicate claims for which the State has provided a statutory penalty may pursue relief through a class action if they forgo statutory damages and instead seek actual damages or injunctive or declaratory relief; any putative class member who objects can opt out and pursue actual damages, if available, and the statutory penalty in an individual action. See, e.g., Mendez v. The Radec Corp., 260 F.R.D. 38, 55 (W.D.N.Y. 2009); Brzychnalski v. Unesco, Inc., 35 F.Supp.2d 351, 353 (S.D.N.Y.1999).^[42] See also Alexander, Practice Commentaries, at 105 ("Even if a statutory penalty or minimum recovery is involved, most courts hold that it can be waived, thus confining the class recovery to actual damages and eliminating the bar of CPLR 901(b)."). In this manner, the Second Circuit explained, "Rule 23's procedural requirements for class actions can be applied along with the substantive requirement of CPLR 901(b)." 549 F.3d, at 144. In sum, while phrased as responsive to the question whether certain class actions may begin, § 901(b) is unmistakably aimed at controlling how those [1468] actions must end. On that remedial issue, Rule 23 is silent.

Any doubt whether Rule 23 leaves § 901(b) in control of the remedial issue at the core of this case should be dispelled by our Erie jurisprudence, including Hanna, which counsels us to read Federal Rules moderately and cautions against stretching a rule to cover every situation it could conceivably reach.^[43] The Court states that "[t]here is no reason ... to read Rule 23 as addressing only whether claims made eligible for class treatment by some other law should be certified as class actions." Ante at 1438. To the contrary, Palmer, Ragan, Cohen, Walker, Gasperini, and Semtek provide good reason to look to the law that creates the right to recover. See supra at 1437-1439. That is plainly so on a more accurate statement of what is at stake: Is there any reason to read Rule 23 as authorizing a claim for relief when the State that created the remedy disallows its pursuit on behalf of a class? None at all is the answer our federal system should give.

Notably, New York is not alone in its effort to contain penalties and minimum recoveries by disallowing class relief; Congress, too, has precluded class treatment for certain claims seeking a statutorily designated minimum recovery. See, e.g., 15 U.S.C. § 1640(a)(2)(B) (Truth in Lending Act) ("[I]n the case of a class action... no minimum recovery shall be applicable."); § 1693m(a)(2)(B) (Electronic Fund Transfer Act) (same); 12 U.S.C. § 4010(a)(2)(B)(i) (Expedited Fund Availability Act) (same). Today's judgment denies to the States the full power Congress has to keep certain monetary awards within reasonable bounds. Cf. Beard v. Kindler, 558 U.S. ___, ___, 130 S.Ct. 612, 618-19, ___ L.Ed.2d ___ (2009) ("In light of ... federalism and comity concerns ... it would seem particularly strange to disregard state ... rules that are substantially similar to those to which we give full force in our own courts."). States may hesitate to create determinate statutory penalties in the future if they are impotent to prevent federal-court distortion of the remedy they have shaped.^[44]

By finding a conflict without considering whether Rule 23 rationally should be read to avoid any collision, the Court unwisely and unnecessarily retreats from the federalism principles undergirding Erie. Had the Court reflected on the respect for state regulatory interests endorsed in our decisions, it would have found no cause to interpret Rule 23 so woodenly—and every [1469] reason not to do so. Cf. Traynor, 37 Tex. L.Rev., at 669 ("It is bad enough for courts to prattle unintelligibly about choice of law, but unforgiveable when inquiry might have revealed that there was no real conflict.").

II

Because I perceive no unavoidable conflict between Rule 23 and § 901(b), I would decide this case by inquiring "whether application of the [state] rule would have so important an effect upon the fortunes of one or both of the litigants that failure to [apply] it would be likely to cause a plaintiff to choose the federal court." Hanna, 380 U.S. at 468, n. 9, 85 S.Ct. 1136. See Gasperini, 518 U.S. at 428, 116 S.Ct. 2211.

Seeking to pretermit that inquiry, Shady Grove urges that the class-action bar in § 901(b) must be regarded as "procedural" because it is contained in the CPLR, which "govern[s] the procedure in civil judicial proceedings in all courts of the state." Brief for Petitioner 34 (quoting CPLR § 101; emphasis in original). Placement in the CPLR is hardly dispositive. The provision held "substantive" for Erie purposes in Gasperini is also contained in the CPLR (§ 5501(c)), as are limitations periods, § 201 et seq., prescriptions plainly "substantive" for Erie purposes however they may be characterized for other purposes, see York, 326 U.S. at 109-112, 65 S.Ct. 1464. See also, e.g., 1 Restatement (Second) of Conflict of Laws § 133, Reporter's Note, p. 369 (1969) (hereinafter Restatement) ("Under the rule of Erie ... the federal courts have classified the burden of persuasion as to contributory negligence as a matter of substantive law that is governed by the rule of the State in which they sit even though the courts of that State have characterized their rule as procedural for choice-of-law purposes."); Cook, "Substance" and "Procedure" in the Conflict of Laws, 42 Yale L.J. 333 (1933).

Shady Grove also ranks § 901(b) as "procedural" because "nothing in [the statute] suggests that it is limited to rights of action based on New York state law, as opposed to federal law or the law of other states"; instead it "applies to actions seeking penalties under any statute." Brief for Petitioner 35-36. See also ante at 1457-1458 (STEVENS, J., concurring in part and concurring in judgment) (Section 901(b) cannot "be understood as a rule that... serves the function of defining New York's rights or remedies" because its "text ... expressly and unambiguously applies not only to claims based on New York law but also to claims based on federal law or the law of any other State.").

It is true that § 901(b) is not specifically limited to claims arising under New York law. But neither is it expressly extended to claims arising under foreign law. The rule prescribes, without elaboration either way, that "an action to recover a penalty... may not be maintained as a class action." We have often recognized that "general words" appearing in a statute may, in fact, have limited application; "[t]he words `any person or persons,'" for example, "are broad enough to comprehend every human being. But general words must not only be limited to cases within the jurisdiction of the state, but also to those objects to which the legislature intended to apply them." United States v. Palmer, 3 Wheat. 610, 631, 4 L.Ed. 471 (1818) (opinion for the Court by Marshall, C. J.). See also Small v. United States, 544 U.S. 385, 388, 125 S.Ct. 1752, 161 L.Ed.2d 651 (2005) ("In law, a legislature that uses the statutory phrase `any person' may or may not mean to include `persons' outside the jurisdiction of the state." (some internal quotation marks omitted)); Flora v. United States, 362 U.S. 145, 149, 80 [1470] S.Ct. 630, 4 L.Ed.2d 623 (1960) (The term "`any sum' is a catchall [phrase,] ... but to say this is not to define what it catches.").

Moreover, Shady Grove overlooks the most likely explanation for the absence of limiting language: New York legislators make law with New York plaintiffs and defendants in mind, i.e., as if New York were the universe. See Baxter, Choice of Law and the Federal System, 16 Stan. L.Rev. 1, 11 (1963) ("[L]awmakers often speak in universal terms but must be understood to speak with reference to their constituents."); cf. Smith v. United States, 507 U.S. 197, 204, n. 5, 113 S.Ct. 1178, 122 L.Ed.2d 548 (1993) (presumption against extraterritoriality rooted in part in "the commonsense notion that Congress generally legislates with domestic concerns in mind").

The point was well put by Brainerd Currie in his seminal article on governmental interest analysis in conflict-of-laws cases. The article centers on a now-archaic Massachusetts law that prevented married women from binding themselves by contract as sureties for their husbands. Discussing whether the Massachusetts prescription applied to transactions involving foreign factors (a foreign forum, foreign place of contracting, or foreign parties), Currie observed:

"When the Massachusetts legislature addresses itself to the problem of married women as sureties, the undeveloped image in its mind is that of Massachusetts married women, husbands, creditors, transactions, courts, and judgments. In the history of Anglo-American law the domestic case has been normal, the conflict-of-laws case marginal." Married Women's Contracts: A Study in Conflict-of-Laws Method, 25 U. Chi. L.Rev. 227, 231 (1958) (emphasis added).

Shady Grove's suggestion that States must specifically limit their laws to domestic rights of action if they wish their enactments to apply in federal diversity litigation misses the obvious point: State legislators generally do not focus on an interstate setting when drafting statutes.^[45]

Shady Grove also observes that a New York court has applied § 901(b) to a federal claim for relief under the Telephone Consumer Protection Act of 1991 (TCPA), 47 U.S.C. § 227, see Rudgayzer & Gratt v. Cape Canaveral Tour & Travel, Inc., 22 App. Div.3d 148, 799 N.Y.S.2d 795 (2005), thus revealing § 901(b)'s "procedural" cast. Brief for Petitioner 36. We note first that the TCPA itself calls for the application of state law. See Rudgayzer, 22 App. Div.3d, at 149-150, 799 N.Y.S.2d, at 796-797 (federal action authorized in state court "if otherwise permitted by the laws or rules of the court of [the] State" (quoting 47 U.S.C. § 227(b)(3))). See also Gottlieb v. Carnival Corp., 436 F.3d 335, 342 (2d Cir.2006) (SOTOMAYOR, J.) [1471] ("Congress sought, via the TCPA, to enact the functional equivalent of a state law."). The TCPA, the Supreme Court of Connecticut has recognized, thus "carves out an exception to th[e] general rule" that "when Erie ... is reversed ..., a state court hearing a federal case is normally required to apply federal substantive law": "Under § 227(b)(3) ... it is state substantive law that determines, as a preliminary matter, whether a federal action under the act may be brought in state court." Weber v. U.S. Sterling Securities, Inc., 282 Conn. 722, 736, 924 A.2d 816, 826 (2007) (in TCPA action governed by New York substantive law, § 901(b) applied even though the claim was pursued in Connecticut state court).

Moreover, statutes qualify as "substantive" for Erie purposes even when they have "procedural" thrusts as well. See, e.g., Cohen, 337 U.S, at 555, 69 S.Ct. 1221; cf. Woods v. Interstate Realty Co., 337 U.S. 535, 536-538, and n. 1, 69 S.Ct. 1235, 93 L.Ed. 1524 (1949) (holding diversity case must be dismissed based on state statute that, by its terms, governed only proceedings in state court). Statutes of limitations are, again, exemplary. They supply "substantive" law in diversity suits, see York, 326 U.S. at 109-112, 65 S.Ct. 1464, even though, as Shady Grove acknowledges, state courts often apply the forum's limitations period as a "procedural" bar to claims arising under the law of another State, see Reply Brief 24, n. 16; Tr. of Oral Arg. 16-17. See also Restatement §§ 142-143 (when adjudicating a foreign cause of action, State may use either its own or the foreign jurisdiction's statute of limitations, whichever is shorter). Similarly, federal courts sitting in diversity give effect to state laws governing the burden of proving contributory negligence, see Palmer v. Hoffman, 318 U.S. 109, 117, 63 S.Ct. 477, 87 L.Ed. 645 (1943), yet state courts adjudicating foreign causes of action often apply their own local law to this issue. See Restatement § 133 and Reporter's Note.

In short, Shady Grove's effort to characterize § 901(b) as simply "procedural" cannot successfully elide this fundamental norm: When no federal law or rule is dispositive of an issue, and a state statute is outcome affective in the sense our cases on Erie (pre and post-Hanna) develop, the Rules of Decision Act commands application of the State's law in diversity suits. Gasperini, 518 U.S. at 428, 116 S.Ct. 2211; Hanna, 380 U.S. at 468, n. 9, 85 S.Ct. 1136; York, 326 U.S. at 109, 65 S.Ct. 1464. As this case starkly demonstrates, if federal courts exercising diversity jurisdiction are compelled by Rule 23 to award statutory penalties in class actions while New York courts are bound by § 901(b)'s proscription, "substantial variations between state and federal [money judgments] may be expected." Gasperini, 518 U.S. at 430, 116 S.Ct. 2211 (quoting Hanna, 380 U.S. at 467-468, 85 S.Ct. 1136 (internal quotation marks omitted)). The "variation" here is indeed "substantial." Shady Grove seeks class relief that is ten thousand times greater than the individual remedy available to it in state court. As the plurality acknowledges, ante at 1448, forum shopping will undoubtedly result if a plaintiff need only file in federal instead of state court to seek a massive monetary award explicitly barred by state law. See Gasperini, 518 U.S. at 431, 116 S.Ct. 2211 ("Erie precludes a recovery in federal court significantly larger than the recovery that would have been tolerated in state court.").^[46] The "accident of diversity of [1472] citizenship," Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), should not subject a defendant to such augmented liability. See Hanna, 380 U.S. at 467, 85 S.Ct. 1136 ("The Erie rule is rooted in part in a realization that it would be unfair for the character or result of a litigation materially to differ because the suit had been brought in a federal court.").

It is beyond debate that "a statutory cap on damages would supply substantive law for Erie purposes." Gasperini, 518 U.S. at 428, 116 S.Ct. 2211. See also id. at 439-440, 116 S.Ct. 2211 (STEVENS, J., dissenting) ("A state-law ceiling on allowable damages ... is a substantive rule of decision that federal courts must apply in diversity cases governed by New York law."); id. at 464, 116 S.Ct. 2211 (SCALIA, J., dissenting) ("State substantive law controls what injuries are compensable and in what amount."). In Gasperini, we determined that New York's standard for measuring the alleged excessiveness of a jury verdict was designed to provide a control analogous to a damages cap. Id. at 429, 116 S.Ct. 2211. The statute was framed as "a procedural instruction," we noted, "but the State's objective [wa]s manifestly substantive." Ibid.

Gasperini's observations apply with full force in this case. By barring the recovery of statutory damages in a class action, § 901(b) controls a defendant's maximum liability in a suit seeking such a remedy. The remedial provision could have been written as an explicit cap: "In any class action seeking statutory damages, relief is limited to the amount the named plaintiff would have recovered in an individual suit." That New York's Legislature used other words to express the very same meaning should be inconsequential.

We have long recognized the impropriety of displacing, in a diversity action, state-law limitations on state-created remedies. See Woods, 337 U.S. at 538, 69 S.Ct. 1235 (in a diversity case, a plaintiff "barred from recovery in the state court ... should likewise be barred in the federal court"); York, 326 U.S. at 108-109, 65 S.Ct. 1464 (federal court sitting in diversity "cannot afford recovery if the right to recover is made unavailable by the State nor can it substantively affect the enforcement of the right as given by the State"). Just as Erie precludes a federal court from entering a deficiency judgment when a State has "authoritatively announced that [such] judgments cannot be secured within its borders," Angel v. Bullington, 330 U.S. 183, 191, 67 S.Ct. 657, 91 L.Ed. 832 (1947), so too Erie should prevent a federal court from awarding statutory penalties aggregated through a class action when New York prohibits this recovery. See also Ragan, 337 U.S. at 533, 69 S.Ct. 1233 ("Where local law qualifies or abridges [a claim], the federal court must follow suit. Otherwise there is a different measure of the cause of action in one court than in the other, and the principle of Erie ... is transgressed."). In sum, because "New York substantive law governs [this] claim for relief, New York law ... guide[s] the allowable damages." Gasperini, 518 U.S. at 437, 116 S.Ct. 2211.^[47]

[1473] III

The Court's erosion of Erie's federalism grounding impels me to point out the large irony in today's judgment. Shady Grove is able to pursue its claim in federal court only by virtue of the recent enactment of the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. § 1332(d). In CAFA, Congress opened federal-court doors to state-law-based class actions so long as there is minimal diversity, at least 100 class members, and at least $5,000,000 in controversy. Ibid. By providing a federal forum, Congress sought to check what it considered to be the overreadiness of some state courts to certify class actions. See, e.g., S.Rep. No. 109-14, p. 4 (2005) (CAFA prevents lawyers from "gam[ing] the procedural rules [to] keep nationwide or multi-state class actions in state courts whose judges have reputations for readily certifying classes." (internal quotation marks omitted)); id. at 22 (disapproving "the `I never met a class action I didn't like' approach to class certification" that "is prevalent in state courts in some localities"). In other words, Congress envisioned fewer— not more—class actions overall. Congress surely never anticipated that CAFA would make federal courts a mecca for suits of the kind Shady Grove has launched: class actions seeking state-created penalties for claims arising under state law—claims that would be barred from class treatment in the State's own courts. Cf. Woods, 337 U.S. at 537, 69 S.Ct. 1235 ("[T]he policy of Erie ... preclude[s] maintenance in ... federal court... of suits to which the State ha[s] closed its courts.").^[48]

* * *

I would continue to approach Erie questions in a manner mindful of the purposes underlying the Rules of Decision Act and the Rules Enabling Act, faithful to precedent, and respectful of important state interests. I would therefore hold that the New York Legislature's limitation on the recovery of statutory damages applies in this case, and would affirm the Second Circuit's judgment.

[1]N.Y. Civ. Prac. Law Ann. § 901 (West 2006) provides:

"(a) One or more members of a class may sue or be sued as representative parties on behalf of all if:"

"1. the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable;"

"2. there are questions of law or fact common to the class which predominate over any questions affecting only individual members;"

"3. the claims or defenses of the representative parties are typical of the claims or defenses of the class;"

"4. the representative parties will fairly and adequately protect the interests of the class; and"

"5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy."

"(b) Unless a statute creating or imposing a penalty, or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action."

[2]Rule 23(a) provides:

"(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:"

"(1) the class is so numerous that joinder of all members is impracticable;"

"(2) there are questions of law or fact common to the class;"

"(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and".

"(4) the representative parties will fairly and adequately protect the interests of the class."

Subsection (b) says that "[a] class action may be maintained if Rule 23(a) is satisfied and if" the suit falls into one of three described categories (irrelevant for present purposes).

[3] Shady Grove had asserted jurisdiction under 28 U.S.C. § 1332(d)(2), which relaxes, for class actions seeking at least $5 million, the rule against aggregating separate claims for calculation of the amount in controversy. See Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 571, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005).

[4] Contrary to the dissent's implication, post at 1466-1467 we express no view as to whether state laws that set a ceiling on damages recoverable in a single suit, see App. A to Brief for Respondent, are pre-empted. Whether or not those laws conflict with Rule 23, § 901(b) does conflict because it addresses not the remedy, but the procedural right to maintain a class action. As Allstate and the dissent note, several federal statutes also limit the recovery available in class actions. See, e.g., 12 U.S.C. § 2605(f)(2)(B); 15 U.S.C. § 1640(a)(2)(B); 29 U.S.C. § 1854(c)(1). But Congress has plenary power to override the Federal Rules, so its enactments, unlike those of the States, prevail even in case of a conflict.

[5] But see, e.g., Asher v. Abbott Labs., 290 App. Div.2d 208, 737 N.Y.S.2d 4 (2002) (treble damages under N.Y. Gen. Bus. Law § 340(5) are nonwaivable, wherefore class actions under that law are barred).

[6] Our decision in Walker v. Armco Steel Corp., 446 U.S. 740, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980), discussed by the dissent, post at 1462-1463, 1466-1467, n. 8, is not to the contrary. There we held that Rule 3 (which provides that a federal civil action is "`commenced'" by filing a complaint in federal court) did not displace a state law providing that "`[a]n action shall be deemed commenced, within the meaning of this article [the statute of limitations], as to each defendant, at the date of the summons which is served on him . . . .'" 446 U.S. at 743, n. 4, 100 S.Ct. 1978 (quoting Okla. Stat., Tit. 12, § 97 (1971); alteration in original, emphasis added). Rule 3, we explained, "governs the date from which various timing requirements of the Federal Rules begin to run, but does not affect state statutes of limitations" or tolling rules, which it did not "purpor[t] to displace." 446 U.S. at 751, 750, 100 S.Ct. 1978. The texts were therefore not in conflict. While our opinion observed that the State's actual-service rule was (in the State's judgment) an "integral part of the several policies served by the statute of limitations," id. at 751, 100 S.Ct. 1978, nothing in our decision suggested that a federal court may resolve an obvious conflict between the texts of state and federal rules by resorting to the state law's ostensible objectives.

[7] The dissent also suggests that we should read the Federal Rules "`with sensitivity to important state interests'" and "`to avoid conflict with important state regulatory policies.'" Post at 1463 (quoting Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 427, n. 7, 438, n. 22, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996)). The search for state interests and policies that are "important" is just as standardless as the "important or substantial" criterion we rejected in Sibbach v. Wilson & Co.,312 U.S. 1, 13-14, 61 S.Ct. 422, 85 L.Ed. 479 (1941), to define the state-created rights a Federal Rule may not abridge.

If all the dissent means is that we should read an ambiguous Federal Rule to avoid "substantial variations [in outcomes] between state and federal litigation," Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 504, 121 S.Ct. 1021, 149 L.Ed.2d 32 (2001) (internal quotation marks omitted), we entirely agree. We should do so not to avoid doubt as to the Rule's validity—since a Federal Rule that fails Erie's forum-shopping test is not ipso facto invalid, see Hanna v. Plumer, 380 U.S. 460, 469-472, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965)—but because it is reasonable to assume that "Congress is just as concerned as we have been to avoid significant differences between state and federal courts in adjudicating claims," Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 37-38, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988) (SCALIA, J., dissenting). The assumption is irrelevant here, however, because there is only one reasonable reading of Rule 23.

[8] The cases chronicled by the dissent, see post at 1461-1464, each involved a Federal Rule that we concluded could fairly be read not to "control the issue" addressed by the pertinent state law, thus avoiding a "direct collision" between federal and state law, Walker, 446 U.S. at 749, 100 S.Ct. 1978 (internal quotation marks omitted). But here, as in Hanna, supra at 470, 85 S.Ct. 1136, a collision is "unavoidable."

[9] The concurrence claims that in Sibbach "[t]he Court . . . had no occasion to consider whether the particular application of the Federal Rules in question would offend the Enabling Act." Post at 1454. Had Sibbach been applying the concurrence's theory, that is quite true—which demonstrates how inconsistent that theory is with Sibbach. For conformity with the Rules Enabling Act was the very issue Sibbach decided: The petitioner's position was that Rules 35 and 37 exceeded the Enabling Act's authorization, 312 U.S. at 9, 13, 61 S.Ct. 422; the Court faced and rejected that argument, id. at 13-16, 61 S.Ct. 422, and proceeded to reverse the lower court for failing to apply Rule 37 correctly, id.at 16, 61 S.Ct. 422. There could not be a clearer rejection of the theory that the concurrence now advocates.

The concurrence responds that the "the specific question of `the obligation of federal courts to apply the substantive law of a state'" was not before the Court, post at 1454 (quoting Sibbach, supra at 9, 61 S.Ct. 422). It is clear from the context, however, that this passage referred to the Erie prohibition of court-created rules that displace state law. The opinion unquestionably dealt with the Federal Rules' compliance with § 2072(b), and it adopted the standard we apply here to resolve the question, which does not depend on whether individual applications of the Rule abridge or modify state-law rights. See 312 U.S. at 13-14, 61 S.Ct. 422. To the extent Sibbach did not address the Federal Rules' validity vis- & Agrave; -vis contrary state law, Hanna surely did, see 380 U.S. at 472, 85 S.Ct. 1136, and it made clear that Sibbach's test still controls, see 380 U.S. at 464-465, 470-471, 85 S.Ct. 1136.

[10] The concurrence insists that we have misread Sibbach, since surely a Federal Rule that "in most cases" regulates procedure does not do so when it displaces one of those "rare" state substantive laws that are disguised as rules of procedure. Post at 1455 n. 13. This mistakes what the Federal Rule regulates for its incidental effects. As we have explained, supra, at 1442-1443, most Rules have some effect on litigants' substantive rights or their ability to obtain a remedy, but that does not mean the Rule itself regulates those rights or remedies.

[11] The concurrence's approach, however, is itself unfaithful to the statute's terms. Section 2072(b) bans abridgement or modification only of "substantive rights," but the concurrence would prohibit pre-emption of "procedural rules that are intimately bound up in the scope of a substantive right or remedy," post at 1458. This would allow States to force a wide array of parochial procedures on federal courts so long as they are "sufficiently intertwined with a state right or remedy." Post at 1455.

[12] The concurrence implies that Sibbach has slipped into desuetude, apparently for lack of sufficient citations. See post at 1455-1456, n. 14. We are unaware of any rule to the effect that a holding of ours expires if the case setting it forth is not periodically revalidated. In any event, the concurrence's account of our shunning of Sibbach is greatly exaggerated. Hanna did not merely cite the case, but recognized it as establishing the governing rule. 380 U.S. at 464-465, 470-471, 85 S.Ct. 1136. Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 445-446, 66 S.Ct. 242, 90 L.Ed. 185 (1946), likewise cited Sibbach and applied the same test, examining the Federal Rule, not the state law it displaced. True, Burlington Northern R. Co. v. Woods, 480 U.S. 1, 107 S.Ct. 967, 94 L.Ed.2d 1 (1987), and for that matter Business Guides, Inc. v. Chromatic Communications Enterprises, Inc., 498 U.S. 533, 111 S.Ct. 922, 112 L.Ed.2d 1140 (1991), did not cite Sibbach. But both cited and followed Hanna—which as noted held out Sibbach as setting forth the governing rule. See Burlington Northern, supra at 5-6, 8, 107 S.Ct. 967; Business Guides, supra at 552-554, 111 S.Ct. 922. Thus, while Sibbachitself may appear infrequently in the U.S. Reports, its rule—and in particular its focus on the Federal Rule as the proper unit of analysis—is alive and well.

In contrast, Hanna's obscure obiter dictum that a court "need not wholly blind itself" to a Federal Rule's effect on a case's outcome, 380 U.S. at 473, 85 S.Ct. 1136—which the concurrence invokes twice, post at 1452, 1455-1456, n. 14—has never resurfaced in our opinions in the 45 years since its first unfortunate utterance. Nor does it cast doubt on Sibbach's straightforward test: As the concurrence notes, Hanna cited Sibbach for that statement, 380 U.S. at 473, 85 S.Ct. 1136, showing it saw no inconsistency between the two.

[13] The concurrence is correct, post at 1453, n. 9, that under our disposition any rule that "really regulates procedure," Sibbach, supra at 14, 61 S.Ct. 422, will pre-empt a conflicting state rule, however "bound up" the latter is with substantive law. The concurrence is wrong, however, that that result proves our interpretation of § 2072(b) implausible, postat 1453, n. 9. The result is troubling only if one stretches the term "substantive rights" in § 2072(b) to mean not only state-law rights themselves, but also any state-law procedures closely connected to them. Neither the text nor our precedent supports that expansive interpretation. The examples the concurrence offers—statutes of limitations, burdens of proof, and standards for appellate review of damages awards—do not make its broad definition of substantive rights more persuasive. They merely illustrate that in rare cases it may be difficult to determine whether a rule "really regulates" procedure or substance. If one concludes the latter, there is no pre-emption of the state rule; the Federal Rule itself is invalid.

The concurrence's concern would make more sense if many Federal Rules that effectively alter state-law rights "bound up with procedures" would survive under Sibbach. But as the concurrence concedes, post at 1454, n. 10, very few would do so. The possible existence of a few outlier instances does not prove Sibbach's interpretation is absurd. Congress may well have accepted such anomalies as the price of a uniform system of federal procedure.

[14] The concurrence argues that its approach is no more "taxing" than ours because few if any Federal Rules that are "facially valid" under the Enabling Act will fail the concurrence's test. Post at 1453-1454, and n. 10. But that conclusion will be reached only after federal courts have considered hundreds of state rules applying the concurrence's inscrutable standard.

[15] The concurrence insists that the task will be easier if courts can "conside[r] the nature and functions of the state law," post at 1454, n. 10, regardless of the law's "form," post at 1449 (emphasis deleted), i.e., what the law actually says. We think that amorphous inquiry into the "nature and functions" of a state law will tend to increase, rather than decrease, the difficulty of classifying Federal Rules as substantive or procedural. Walking through the concurrence's application of its test to § 901(b), post at 1457-1460, gives little reason to hope that its approach will lighten the burden for lower courts.

[16] See also Gasperini v. Center for Humanities, Inc., 518 U.S. 415, 427, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996); E. Chemerinsky, Federal Jurisdiction § 5.3, p. 327 (5th ed.2007) (hereinafter Chemerinsky); 17A J. Moore et al., Moore's Federal Practice § 124.01[1] (3d ed.2009) (hereinafter Moore).

[17] The Erie choice requires that the court consider "the twin aims of the Erie rule: discouragement of forum-shopping and avoidance of inequitable administration of the laws." Hanna v. Plumer, 380 U.S. 460, 468, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965); see also Gasperini, 518 U.S. at 427-428, 116 S.Ct. 2211 (describing Erie inquiry).

[18] See Chemerinsky § 5.3, at 321 (observing that courts "have struggled to develop an approach that permits uniform procedural rules to be applied in federal court while still allowing state substantive law to govern").

[19] Cf. Milam v. State Farm Mut. Auto. Ins. Co., 972 F.2d 166, 170 (C.A.7 1992) (Posner, J.) (holding that "where a state in furtherance of its substantive policy makes it more difficult to prove a particular type of state-law claim, the rule by which it does this, even if denominated a rule of evidence or cast in evidentiary terms, will be given effect in a diversity suit as an expression of state substantive policy"); Moore § 124.09[2] (listing examples of federal courts that apply state evidentiary rules to diversity suits). Other examples include state-imposed burdens of proof.

[20] I thus agree with Justice GINSBURG, post at 1461-1463, that a federal rule, like any federal law, must be interpreted in light of many different considerations, including "sensitivity to important state interests," post at 1463, and "regulatory policies," post at 1460. See Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 37-38, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988) (SCALIA, J., dissenting) ("We should assume . . . when it is fair to do so, that Congress is just as concerned as we have been to avoid significant differences between state and federal courts in adjudicating claims . . . . Thus, in deciding whether a federal. . . Rule of Procedure encompasses a particular issue, a broad reading that would create significant disuniformity between state and federal courts should be avoided if the text permits"). I disagree with Justice GINSBURG, however, about the degree to which the meaning of federal rules may be contorted, absent congressional authorization to do so, to accommodate state policy goals.

[21] See also Ortiz v. Fibreboard Corp., 527 U.S. 815, 842, 845, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999) (adopting "limiting construction" of Federal Rule of Civil Procedure 23 that, inter alia, "minimizes potential conflict with the Rules Enabling Act"); Amchem Products, Inc. v. Windsor, 521 U.S. 591, 612-613, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997) (observing that federal rules "must be interpreted in keeping with the Rules Enabling Act, which instructs that rules of procedure `shall not abridge, enlarge or modify any substantive right'").

[22] This understanding of the Enabling Act has been the subject of substantial academic criticism, and rightfully so. See, e.g., Wright § 4509, at 264, 269-270, 272; Ely, The Irrepressible Myth of Erie, 87 Harv. L.Rev. 693, 719 (1974) (hereinafter Ely); see also R. Fallon, J. Manning, D. Meltzer, & D. Shapiro, Hart and Wechsler's, The Federal Courts and the Federal System 593, n. 6 (6th ed.2009) (discussing Ely).

[23] Justice SCALIA concedes as much, see ante at 1445-1446, but argues that insofar as I allow for the possibility that a federal rule might violate the Enabling Act when it displaces a seemingly procedural state rule, my approach is itself "unfaithful to the statute's terms," which cover "substantive rights" but not "procedural rules," ante at 1446, n. 11 (internal quotation marks omitted). This is not an objection to my interpretation of the Enabling Act—that courts must look to whether a federal rule alters substantive rights in a given case—but simply to the way I would apply it, allowing for the possibility that a state rule that regulates something traditionally considered to be procedural might actually define a substantive right. JUSTICE SCALIA's objection, moreover, misses the key point: In some instances, a state rule that appears procedural really is not. A rule about how damages are reviewed on appeal may really be a damages cap. See Gasperini, 518 U.S. at 427, 116 S.Ct. 2211. A rule that a plaintiff can bring a claim for only three years may really be a limit on the existence of the right to seek redress. A rule that a claim must be proved beyond a reasonable doubt may really be a definition of the scope of the claim. These are the sorts of rules that one might describe as "procedural," but they nonetheless define substantive rights. Thus, if a federal rule displaced such a state rule, the federal rule would have altered the State's "substantive rights."

[24] The plurality's interpretation of the Enabling Act appears to mean that no matter how bound up a state provision is with the State's own rights or remedies, any contrary federal rule that happens to regulate "the manner and the means by which the litigants' rights are enforced," ante at 1442 (internal quotation marks omitted), must govern. There are many ways in which seemingly procedural rules may displace a State's formulation of its substantive law. For example, statutes of limitations, although in some sense procedural rules, can also be understood as a temporal limitation on legally created rights; if this Court were to promulgate a federal limitations period, federal courts would still, in some instances, be required to apply state limitations periods. Similarly, if the federal rules altered the burden of proof in a case, this could eviscerate a critical aspect—albeit one that deals with how a right is enforced— of a State's framework of rights and remedies. Or if a federal rule about appellate review displaced a state rule about how damages are reviewed on appeal, the federal rule might be pre-empting a state damages cap. Cf. Gasperini,518 U.S. at 427, 116 S.Ct. 2211.

Justice SCALIA responds that some of these federal rules might be invalid under his view of the Enabling Act because they may not "really regulat[e] procedure." Ante at 1447, n. 13 (internal quotation marks omitted). This response, of course, highlights how empty the plurality's test really is. See n. 10, infra. The response is also limited to those rules that can be described as "regulat[ing]" substance, ante at ___; it does not address those federal rules that alter the right at issue in the litigation, see Sibbach v. Wilson & Co., 312 U.S. 1, 13-14, 61 S.Ct. 422, 85 L.Ed. 479 (1941), only when they displace particular state laws. JUSTICE SCALIA speculates that "Congress may well have accepted" the occasional alteration of substantive rights "as the price of a uniform system of federal procedure." Ante at 1446-1447, n. 13. Were we forced to speculate about the balance that Congress struck, I might very well agree. But no speculation is necessary because Congress explicitly told us that federal rules "shall not" alter "any" substantive right. § 2072(b).

[25] It will be rare that a federal rule that is facially valid under 28 U.S.C. § 2072 will displace a State's definition of its own substantive rights. See Wright § 4509, at 272 (observing that "unusual cases occasionally might arise in which . . . because of an unorthodox state rule of law, application of a Civil Rule . . . would intrude upon state substantive rights"). JUSTICE SCALIA's interpretation, moreover, is not much more determinative than mine. Although it avoids courts' having to evaluate state law, it tasks them with figuring out whether a federal rule is really "procedural." It is hard to know the answer to that question and especially hard to resolve it without considering the nature and functions of the state law that the federal rule will displace. The plurality's "`test' is no test at all—in a sense, it is little more than the statement that a matter is procedural if, by revelation, it is procedural." Id., § 4509 at 264.

[26] The petitioner in Sibbach argued only that federal rules could not validly address subjects involving "important questions of policy," Supp. Brief of Petitioner, O.T.1940, No. 28, p. 7; see also Reply to Brief of Respondent, O.T. 1940, No. 28, p. 2 (summarizing that the petitioner argued only that "[t]he right not to be compelled to submit to a physical examination" is "a `substantive' right forbidden by Congress" to be addressed by the Federal Rules of Civil Procedure, "even though in theory the right is not of the character determinative of litigation"). In the petitioner's own words, "[t]his contention . . . [did] not in itself involve the [applicable] law of Illinois," ibid., and the petitioner in her briefing referenced the otherwise applicable state law only "to show that [she] was in a position to make the contention," ibid., that is, to show that the federal court was applying a federal rule and not, under the Rules of Decision Act, applying state law, see id. at 3.

[27] The plurality defends its view by including a long quote from two paragraphs of Sibbach. Ante at 1443-1444. But the quoted passage of Sibbach describes only a facial inquiry into whether federal rules may "deal with" particular subject matter. 312 U.S. at 13, 61 S.Ct. 422. The plurality's block quote, moreover, omits half of one of the quoted paragraphs, in which the Court explained that the term "substantive rights" in the Enabling Act "certainly embraces such rights" as "rights conferred by law to be protected and enforced," such as "the right not to be injured in one's person by another's negligence" and "to redress [such] infraction." Ibid. But whether a federal rule, for example, enlarges the right "to redress [an] infraction," will depend on the state law that it displaces.

[28] Put another way, even if a federal rule in most cases "really regulates procedure," Sibbach, 312 U.S. at 14, 61 S.Ct. 422, it does not "really regulat[e] procedure" when it displaces those rare state rules that, although "procedural" in the ordinary sense of the term, operate to define the rights and remedies available in a case. This is so because what is procedural in one context may be substantive in another. See Hanna, 380 U.S. at 471, 85 S.Ct. 1136; Guaranty Trust Co. v. York, 326 U.S. 99, 108, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945).

[29] Although this Court's decision in Hanna cited Sibbach, that is of little significance. Hanna did not hold that any seemingly procedural federal rule will always govern, even when it alters a substantive state right; nor, as in Sibbach, was the argument that I now make before the Court. Indeed, in Hanna we cited Sibbach's statement that the Enabling Act prohibits federal rules that alter the rights to be adjudicated by the litigants, 312 U.S. at 13-14, 61 S.Ct. 422, for the proposition that "a court, in measuring a Federal Rule against the standards contained in the Enabling Act. . . need not wholly blind itself to the degree to which the Rule makes the character and result of the federal litigation stray from the course it would follow in state courts," 380 U.S. at 473, 85 S.Ct. 1136. And most of our subsequent decisions that have squarely addressed the framework for applying federal rules in diversity cases have not mentioned Sibbach at all but cited only Hanna. See, e.g., Burlington Northern R. Co. v. Woods,480 U.S. 1, 5, 107 S.Ct. 967, 94 L.Ed.2d 1 (1987).

Justice SCALIA notes that in Mississippi Publishing Corp. v. Murphree, 326 U.S. 438, 66 S.Ct. 242, 90 L.Ed. 185 (1946), we used language that supported his view. See ante at 1442-1443. But in that case, we contemplated only that the Federal Rule in question might have "incidental effects . . . upon the rights of litigants," explaining that "[t]he fact that the application of Rule 4(f) will operate to subject petitioner's rights to adjudication by the district court for northern Mississippi" rather than southern Mississippi "will undoubtedly affect those rights." 326 U.S. at 445-446, 66 S.Ct. 242. There was no suggestion that by affecting the method of enforcing the rights in that case, the federal rules could plausibly abridge, enlarge, or modify the rights themselves.

[30] Nor do I see how it follows from the dissent's premises that a class cannot be certified. The dissent contends that § 901(b) is a damages "limitation," post at 1463, n. 2, 1464, 1464-1465, 1466, 1473, or "proscription," post at 1466, n. 6, 1471, whereas Rule 23 "does not command that a particular remedy be available when a party sues in a representative capacity," postat 1465, and that consequently both provisions can apply. Yet even if the dissent's premises were correct, Rule 23 would still control the question whether petitioner may certify a class, and § 901(b) would be relevant only to determine whether petitioner, at the conclusion of a class-action lawsuit, may collect statutory damages.

It may be that if the dissent's interpretation of § 901(b) were correct, this class could not (or has not) alleged sufficient damages for the federal court to have jurisdiction, see 28 U.S.C. § 1332(d)(6). But that issue was not raised in respondent's motion to dismiss (from which the case comes to this Court), and it was not squarely presented to the Court. In any event, although the lead plaintiff has "acknowledged that its individual claim" is for less than the required amount in controversy, see 549 F.3d 137, 140 (C.A.2 2008), we do not know what actual damages the entire class can allege. Thus, even if the Court were to adopt all of the dissent's premises, I believe the correct disposition would be to vacate and remand for further consideration of whether the required amount in controversy has or can be met.

[31] In its Erie analysis, the dissent observes that when sovereigns create laws, the enacting legislatures sometimes assume those laws will apply only within their territory. See post at 1469-1471. That is a true fact, but it does not do very much work for the dissent's position. For one thing, as the dissent observes, this Erie analysis is relevant only if there is no conflict between Rule 23 and § 901(b), and the court can thus apply both. Post at 1469. But because, in my view, Rule 23 applies, the only question is whether it would violate the Enabling Act. See Hanna, 380 U.S. at 471, 85 S.Ct. 1136. And that inquiry is different from the Rules of Decision Act, or Erie, inquiry. See id.at 469-471, 85 S.Ct. 1136.

The dissent's citations, moreover, highlight simply that when interpreting statutes, context matters. Thus, we sometimes presume that laws cover only domestic conduct and sometimes do not, depending upon, inter alia, whether it makes sense in a given situation to assume that "the character of an act as lawful or unlawful must be determined wholly by the law of the [place] where the act is done," American Banana Co. v. United Fruit Co., 213 U.S. 347, 356, 29 S.Ct. 511, 53 L.Ed. 826 (1909). But in the context of § 901(b), a presumption against extraterritoriality makes little sense. That presumption applies almost only to laws governing what people can or cannot do. Section 901(b), however, is not directed to the conduct of persons but is instead directed to New York courts. Thus, § 901(b) is, by its own terms, not extraterritorial insofar as it states that it governs New York courts. It is possible that the New York Legislature simply did not realize that New York courts hear claims under other sources of law and that other courts hear claims under New York law, and therefore mistakenly believed that they had written a limit on New York remedies. But because New York set up § 901(b) as a general rule about how its courts operate, my strong presumption is to the contrary.

[32] To be sure, one could imagine the converse story, that a legislature would create statutory penalties but dictate that such penalties apply only when necessary to overcome the costs and inconvenience of filing a lawsuit, and thus are not necessary in a class action. But it is hard to see how that narrative applies to New York, given that New York's penalty provisions, on their face, apply to all plaintiffs, be they class or individual, and that § 901(b) addresses penalties that are created under any source of state or federal law.

[33] Justice GINSBURG asserts that class certification in this matter would "transform a $500 case into a $5,000,000 award." Post at 1460. But in fact, class certification would transform 10,000 $500 cases into one $5,000,000 case. It may be that without class certification, not all of the potential plaintiffs would bring their cases. But that is true of any procedural vehicle; without a lower filing fee, a conveniently located courthouse, easy-to-use federal procedural rules, or many other features of the federal courts, many plaintiffs would not sue.

[34] The Rules of Decision Act directs that, "[t]he laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply." 28 U.S.C. § 1652.

[35] Justice STEVENS stakes out common ground on this point: "[F]ederal rules," he observes, "must be interpreted with some degree of `sensitivity to important state interests and regulatory policies,' ... and applied to diversity cases against the background of Congress' command that such rules not alter substantive rights and with consideration of `the degree to which the Rule makes the character and result of the federal litigation stray from the course it would follow in state courts,' Hanna [v. Plumer], 380 U.S. [460, 473, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965)]." Ante at 1449. (opinion concurring in part and concurring in judgment). See also ante at 1450 ("A `state procedural rule, though undeniably procedural in the ordinary sense of the term' may exist `to influence substantive outcomes,'... and may in some instances become so bound up with the state-created right or remedy that it defines the scope of that substantive right or remedy." (some internal quotation marks omitted)); ante at 1450 ("When a State chooses to use a traditionally procedural vehicle as a means of defining the scope of substantive rights or remedies, federal courts must recognize and respect that choice."). Nevertheless, Justice STEVENS sees no reason to read Rule 23 with restraint in this particular case; the Federal Rule preempts New York's damages limitation, in his view, because § 901(b) is "a procedural rule that is not part of New York's substantive law." Ante at 1448. This characterization of § 901(b) does not mirror reality, as I later explain. See infra at 1469-1473. But a majority of this Court, it bears emphasis, agrees that Federal Rules should be read with moderation in diversity suits to accommodate important state concerns.

[36] Even in the mine-run case, a class action can result in "potentially ruinous liability." Advisory Committee's Notes on Fed. Rule Civ. Proc. 23, 28 U.S.C.App., p. 143. A court's decision to certify a class accordingly places pressure on the defendant to settle even unmeritorious claims. See, e.g., Coopers & Lybrand v. Livesay, 437 U.S. 463, 476, 98 S.Ct. 2454, 57 L.Ed.2d 351 (1978). When representative plaintiffs seek statutory damages, pressure to settle may be heightened because a class action poses the risk of massive liability unmoored to actual injury. See, e.g., Ratner v. Chemical Bank New York Trust Co., 54 F.R.D. 412, 416 (S.D.N.Y.1972) (exercising "considerable discretion of a pragmatic nature" to refuse to certify a class because the plaintiffs suffered negligible actual damages but sought statutory damages of $13,000,000).

[37] See, e.g., In re Automotive Refinishing Paint Antitrust Litigation, 515 F.Supp.2d 544, 549-551 (E.D.Pa.2007); Leider v. Ralfe, 387 F.Supp.2d 283, 289-292 (S.D.N.Y.2005); Dornberger v. Metropolitan Life Insurance Co., 182 F.R.D. 72, 84 (S.D.N.Y.1999). See also Weber v. U.S. Sterling Securities, Inc., 282 Conn. 722, 738-739, 924 A.2d 816, 827-828 (2007) (section 901(b) applied in Connecticut state court to action governed by New York substantive law).

[38] Shady Grove projects that a dispensation in favor of Allstate would require "courts in all diversity class actions ... [to] look to state rules and decisional law rather than to Rule 23 ... in making their class certification decisions." Brief for Petitioner 55. This slippery-slope projection is both familiar and false. Cf. R. Bork, The Tempting of America 169 (1990) ("Judges and lawyers live on the slippery slope of analogies; they are not supposed to ski it to the bottom."). In this case, CPLR § 901(a) lists the state-law prerequisites for class certification, but Allstate does not contend that § 901(a) overrides Rule 23. Brief for Respondent 18 ("There is no dispute that the criteria for class certification under state law do not apply in federal court; that is the ground squarely occupied by Rule 23."). Federal courts sitting in diversity have routinely applied Rule 23's certification standards, rather than comparable state provisions. See, e.g., In re New Motor Vehicles Canadian Export Antitrust Litigation, 522 F.3d 6, 18-24 (C.A.1 2008); Order and Reasons in In re Katrina Canal Breaches Consolidated Litigation, Civ. Action No. 05-4182, 2009 WL 2447846 (E.D.La. Aug. 6, 2009).

[39] The Court disputes the strength of the evidence of legislative intent, see ante at 1440, but offers no alternative account of § 901(b)'s purpose. Perhaps this silence indicates how very hard it would be to ascribe to § 901(b) any purpose bound up with the fairness and efficiency of processing cases. On its face, the proscription is concerned with remedies, i.e., the availability of statutory damages in a lawsuit. Legislative history confirms this objective, but is not essential to revealing it.

[40] There is, of course, a difference between "justly administering [a] remedy," Sibbach v. Wilson & Co., 312 U.S. 1, 14, 61 S.Ct. 422, 85 L.Ed. 479 (1941), and prescribing the content of that remedy; if Rule 23 can be read to increase a plaintiff's recovery from $1,000,000 to some greater amount, the Rule has arguably "enlarge[d] ... [a] substantive right" in violation of the Rules Enabling Act. 28 U.S.C. § 2072(b). The plurality appears to acknowledge this point, stating that the Federal Rules we have found to be in compliance with the Act have not "altered ... available remedies." Ante at 1443. But the Court's relentless reading of Rule 23 today does exactly that: The Federal Rule, it says, authorizes the recovery of class-size statutory damages even though the New York provision instructs that such penalties shall not be available.

[41] The Court states that "[w]e cannot rewrite [a state law] to reflect our perception of legislative purpose." Ante at 1440. But we can, of course, interpret the Federal Rules in light of a State's regulatory policy to decide whether and to what extent a Rule preempts state law. See supra at 1461-1463. Just as we read Federal Rule 3 in Walker v. Armco Steel Corp., 446 U.S. 740, 751, 100 S.Ct. 1978, 64 L.Ed.2d 659 (1980), not to govern when a suit commences for purposes of tolling a state statute of limitations (although the Rule indisputably controls when an action commences for federal procedural purposes), so too we could read Rule 23 not to direct when a class action may be maintained for purposes of recovering statutory damages prescribed by state law. On this reading of Rule 23, no rewriting of § 901(b) is necessary to avoid a conflict.

[42] The New York Legislature appears to have anticipated this result. In discussing the remedial bar effected by § 901(b), the bill's sponsor explained that a "statutory class action for actual damages would still be permissible." S. Fink, [Sponsor's] Memorandum, Bill Jacket, L. 1975, Ch. 207. See also State Consumer Protection Board Memorandum (May 29, 1975), Bill Jacket, L. 1975, Ch. 207. On this understanding, New York courts routinely authorize class actions when the class waives its right to receive statutory penalties. See, e.g., Cox v. Microsoft Corp., 8 A.D.3d 39, 778 N.Y.S.2d 147 (2004); Pesantez v. Boyle Env. Servs., Inc., 251 A.D.2d 11, 673 N.Y.S.2d 659 (1998); Ridge Meadows Homeowners' Assn., Inc. v. Tara Development Co., 242 A.D.2d 947, 665 N.Y.S.2d 361 (1997); Super Glue Corp. v. Avis Rent A Car System, Inc., 132 A.D.2d 604, 517 N.Y.S.2d 764 (1987); Weinberg v. Hertz Corp., 116 A.D.2d 1, 499 N.Y.S.2d 693 (1986).

[43] The plurality notes that "we have rejected every statutory challenge to a Federal Rule that has come before us." Ante at 1442. But it omits that we have interpreted Rules with due restraint, including Rule 23, thus diminishing prospects for the success of such challenges. See Ortiz v. Fibreboard Corp., 527 U.S. 815, 842, 119 S.Ct. 2295, 144 L.Ed.2d 715 (1999); Amchem Products, Inc. v. Windsor, 521 U.S. 591, 612-613, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997); supra at 1437-1440.

[44] States have adopted a variety of formulations to limit the use of class actions to gain certain remedies or to pursue certain claims, as illustrated by the 96 examples listed in Allstate's brief. Apps. to Brief for Respondent. The Court's "one-size-fits-all" reading of Rule 23, ante at 1437, likely prevents the enforcement of all of these statutes in diversity actions—including the numerous state statutory provisions that, like § 901(b), attempt to curb the recovery of statutory damages. See, e.g., Cal. Civ.Code Ann. § 2988.5(a)(2) (West 1993); Colo.Rev.Stat. Ann. § 12-14.5-235(d) (2009); Conn. Gen.Stat. § 36a-683(a) (2009); Haw.Rev.Stat. § 489-7.5(b)(1) (2008); Ind. Code § 24-4.5-5-203(a)(2) (2004); Ky.Rev. Stat. Ann. § 367.983(1)(c) (West 2006); Mass. Gen. Laws, ch. 167B, § 20(a)(2)(B) (2008); Mich. Comp. Laws Ann. § 493.112(3)(c) (West 2005); N.M. Stat. Ann. § 58-16-15(B) (Lexis 2004); Ohio Rev.Code Ann. § 1351.08(A) (West 2004); Okla. Stat., Tit. 14A, § 5-203(1) (2007 Supp.); Wyo. Stat. Ann. § 40-19-119(a)(iii) (2009).

[45] Shady Grove's argument that § 901(b) is procedural based on its possible application to foreign claims is also out of sync with our Erie decisions, many of them involving state statutes of similarly unqualified scope. The New Jersey law at issue in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 544, n. 1, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949), for example, required plaintiffs to post a bond as security for costs in "any [stockholder's derivative] action." (quoting 1945 N.J. Laws ch. 131 (emphasis added)). See also, e.g., Walker, 446 U.S. at 742-743, and n. 4, 100 S.Ct. 1978 (Oklahoma statute deemed "[a]n action" commenced for purposes of the statute of limitations upon service of the summons (quoting Okla. Stat., Tit. 12, § 97 (1971))). Our characterization of a state statute as substantive for Erie purposes has never hinged on whether the law applied only to domestic causes of action. To the contrary, we have ranked as substantive a variety of state laws that the state courts apply to federal and out-of-state claims, including statutes of limitations and burden-of-proof prescriptions. See infra at 1471.

[46] In contrast, many "state rules ostensibly addressed to procedure," ante at 1441 (majority opinion)—including pleading standards and rules governing summary judgment, pre-trial discovery, and the admissibility of certain evidence—would not so hugely impact forum choices. It is difficult to imagine a scenario that would promote more forum shopping than one in which the difference between filing in state and federal court is the difference between a potential award of $500 and one of $5,000,000.

[47] There is no question that federal courts can "give effect to the substantive thrust of [§ 901(b)] without untoward alteration of the federal scheme for the trial and decision of civil cases." Gasperini, 518 U.S. at 426, 116 S.Ct. 2211. There is no risk that individual plaintiffs seeking statutory penalties will flood federal courts with state-law claims that could be managed more efficiently on a class basis; the diversity statute's amount-in-controversy requirement ensures that small state-law disputes remain in state court.

[48] It remains open to Congress, of course, to exclude from federal-court jurisdiction under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d), claims that could not be maintained as a class action in state court.