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

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

Mr. Meyer Abrams for respondent.

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

MR. JUSTICE FRANKFURTER delivered the opinion of the Court.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So ordered.

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

MR. JUSTICE RUTLEDGE.

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

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

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

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

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

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

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

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

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

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

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

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

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

MR. JUSTICE MURPHY joins in this opinion.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[526] Henry Hammer argued the cause for petitioner. With him on the briefs were Henry H. Edens and William E. Chandler, Jr.

Wesley M. Walker argued the cause for respondent. With him on the reargument and on the briefs was Ray R. Williams.

MR. JUSTICE BRENNAN delivered the opinion of the Court.

This case was brought in the District Court for the Western District of South Carolina. Jurisdiction was based on diversity of citizenship. 28 U. S. C. § 1332. The petitioner, a resident of North Carolina, sued respondent, a South Carolina corporation, for damages for injuries allegedly caused by the respondent's negligence. He had judgment on a jury verdict. The Court of Appeals for the Fourth Circuit reversed and directed the entry of judgment for the respondent. 238 F. 2d 346. We granted certiorari, 352 U. S. 999, and subsequently ordered reargument, 355 U. S. 950.

The respondent is in the business of selling electric power to subscribers in rural sections of South Carolina. The petitioner was employed as a lineman in the construction crew of a construction contractor. The contractor, R. H. Bouligny, Inc., held a contract with the respondent in the amount of $334,300 for the building of some 24 miles of new power lines, the reconversion to higher capacities of about 88 miles of existing lines, and the construction of 2 new substations and a breaker station. [527] The petitioner was injured while connecting power lines to one of the new substations.

One of respondent's affirmative defenses was that, under the South Carolina Workmen's Compensation Act,^[1] the petitioner—because the work contracted to be done by his employer was work of the kind also done by the respondent's own construction and maintenance crews— had the status of a statutory employee of the respondent and was therefore barred from suing the respondent at law because obliged to accept statutory compensation benefits as the exclusive remedy for his injuries.^[2] Two questions [528] concerning this defense are before us: (1) whether the Court of Appeals erred in directing judgment for respondent without a remand to give petitioner an opportunity to introduce further evidence; and (2) whether petitioner, state practice notwithstanding, is entitled to a jury determination of the factual issues raised by this defense.

I.

The Supreme Court of South Carolina has held that there is no particular formula by which to determine whether an owner is a statutory employer under § 72-111. In Smith v. Fulmer, 198 S. C. 91, 97, 15 S. E. 2d 681, 683, the State Supreme Court said:

"And the opinion in the Marchbanks case [Marchbanks v. Duke Power Co., 190 S. C. 336, 2 S. E. 2d 825, said to be the "leading case" under the statute] reminds us that while the language of the statute is plain and unambiguous, there are so many different factual situations which may arise that no easily applied formula can be laid down for the determination of all cases. In other words, `it is often a matter of extreme difficulty to decide whether the work in a given case falls within the designation of the statute. It is in each case largely a question of degree and of fact.' "

The respondent's manager testified on direct examination that three of its substations were built by the respondent's own construction and maintenance crews. When pressed on cross-examination, however, his answers left his testimony in such doubt as to lead the trial judge to say, "I understood he changed his testimony, that they had not built three." But the credibility of the manager's testimony, and the general question whether the evidence in support of the affirmative defense presented [529] a jury issue, became irrelevant because of the interpretation given § 72-111 by the trial judge. In striking respondent's affirmative defense at the close of all the evidence^[3] he ruled that the respondent was the statutory employer of the petitioner only if the construction work done by respondent's crews was done for somebody else, and was not the statutory employer if, as the proofs showed, the crews built facilities only for the respondent's own use. "My idea of engaging in the business is to do something for somebody else. What they [the respondent] are doing—and everything they do about repairing lines and building substations, they do it for themselves." On this view of the meaning of the statute, the evidence, even accepting the manager's testimony on direct examination as true, lacked proof of an essential element of the affirmative defense, and there was thus nothing for the petitioner to meet with proof of his own.

The Court of Appeals disagreed with the District Court's construction of § 72-111. Relying on the decisions of the Supreme Court of South Carolina, among others, in Marchbanks v. Duke Power Co., 190 S. C. 336, 2 S. E. 2d 825, and Boseman v. Pacific Mills, 193 S. C. 479, 8 S. E. 2d 878, the Court of Appeals held that the statute granted respondent immunity from the action if the proofs established that the respondent's own crews had constructed lines and substations which, like the work contracted to the petitioner's employer, were necessary for the distribution of the electric power which the respondent was in the business of selling. We ordinarily accept the interpretation of local law by the Court of [530] Appeals, cf. Ragan v. Merchants Transfer Co., 337 U. S. 530, 534, and do so readily here since neither party now disputes the interpretation.

However, instead of ordering a new trial at which the petitioner might offer his own proof pertinent to a determination according to the correct interpretation, the Court of Appeals made its own determination on the record and directed a judgment for the respondent. The court noted that the Rural Electric Cooperative Act of South Carolina^[4] authorized the respondent to construct, acquire, maintain, and operate electric generating plants, buildings, and equipment, and any and all kinds of property which might be necessary or convenient to accomplish the purposes for which the corporation was organized, and pointed out that the work contracted to the petitioner's employer was of the class which respondent was empowered by its charter to perform.

The court resolved the uncertainties in the manager's testimony in a manner largely favorable to the respondent: "The testimony with respect to the construction of the substations of Blue Ridge, stated most favorably to the . . . [petitioner], discloses that originally Blue Ridge built three substations with its own facilities, but that all of the substations which were built after the war, including the six it was operating at the time of the accident, were constructed for it by independent contractors, and that at the time of the accident it had no one in its direct employ capable of handling the technical detail of substation construction." 238 F. 2d 346, 350.

The court found that the respondent financed the work contracted to the petitioner's employer with a loan from the United States, purchased the materials used in the work, and entered into an engineering service contract with an independent engineering company for the design [531] and supervision of the work, concluding from these findings that "the main actor in the whole enterprise was the Cooperative itself." Ibid.

Finally, the court held that its findings entitled the respondent to the direction of a judgment in its favor. ". . . [T]here can be no doubt that Blue Ridge was not only in the business of supplying electricity to rural communities, but also in the business of constructing the lines and substations necessary for the distribution of the product . . . ." Id., at 351.

While the matter is not adverted to in the court's opinion, implicit in the direction of verdict is the holding that the petitioner, although having no occasion to do so under the District Court's erroneous construction of the statute, was not entitled to an opportunity to meet the respondent's case under the correct interpretation. That holding is also implied in the court's denial, without opinion, of petitioner's motion for a rehearing sought on the ground that ". . . [T]he direction to enter judgment for the defendant instead of a direction to grant a new trial denies plaintiff his right to introduce evidence in contradiction to that of the defendant on the issue of defendant's affirmative defense, a right which he would have exercised if the District Judge had ruled adversely to him on his motion to dismiss, and thus deprives him of his constitutional right to a jury trial on a factual issue."

We believe that the Court of Appeals erred. We do not agree with the petitioner's argument in this Court that the respondent's evidence was insufficient to withstand the motion to strike the defense and that he is entitled to our judgment reinstating the judgment of the District Court. But the petitioner is entitled to have the question determined in the trial court. This would be necessary even if petitioner offered no proof of his own. Although the respondent's evidence was sufficient to withstand the motion under the meaning given the [532] statute by the Court of Appeals, it presented a fact question, which, in the circumstances of this case to be discussed infra, is properly to be decided by a jury. This is clear not only because of the issue of the credibility of the manager's vital testimony, but also because, even should the jury resolve that issue as did the Court of Appeals, the jury on the entire record—consistent with the view of the South Carolina cases that this question is in each case largely one of degree and of fact—might reasonably reach an opposite conclusion from the Court of Appeals as to the ultimate fact whether the respondent was a statutory employer.

At all events, the petitioner is plainly entitled to have an opportunity to try the issue under the Court of Appeals' interpretation. His motion to dismiss the affirmative defense, properly viewed, was analogous to a defendant's motion for involuntary dismissal of an action after the plaintiff has completed the presentation of his evidence. Under Rule 41 (b) of the Federal Rules of Civil Procedure, in such case "the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief." The respondent argues, however, that before the trial judge ruled on the petitioner's motion, the petitioner's counsel, in effect, conceded that he had no other evidence to offer and was submitting the issue of whether the respondent was a statutory employer on the basis of the evidence already in the case. The judge asked petitioner's counsel: "In the event I overrule your motion, do you contemplate putting up any testimony in reply?" Counsel answered: "We haven't discussed it, but we are making that motion. I frankly don't know at this point of any reply that is necessary. I don't know of any evidence in this case—." The interruption which prevented counsel's completion of the answer was the trial judge's [533] comment: "I am inclined to think so far it is a question of law but I will hear from Mr. Walker [respondent's counsel] on that. I don't know of any issue of fact to submit to the jury. It seems to me under the testimony here there has been—I don't know of any conflict in the testimony, so far as that's concerned, so far." The judge turned to respondent's counsel and there followed a long colloquy with him,^[5] at the conclusion of which the judge dismissed the defense upon the ground that under his interpretation of the statute the defense was not sustained without evidence that the respondent's business involved the doing of work for others of the kind done by the petitioner's employer for the respondent. Upon this record it plainly cannot be said that the petitioner submitted the issue upon the evidence in the case and conceded that he had no evidence of his own to offer. The petitioner was fully justified in that circumstance in not coming forward with proof of his own at that stage of the proceedings, for he had nothing to meet under the District Court's view of the statute. He thus cannot be penalized by the denial of his day in court to try the issue under the correct interpretation of the statute. Cf. Fountain v. Filson, 336 U. S. 681; Weade v. Dichmann, Wright & Pugh, Inc., 337 U. S. 801; Globe Liquor Co. v. San Roman, 332 U. S. 571; Cone v. West Virginia Paper Co., 330 U. S. 212.

II.

A question is also presented as to whether on remand the factual issue is to be decided by the judge or by the jury. The respondent argues on the basis of the decision of the Supreme Court of South Carolina in Adams v. Davison-Paxon [534] Co., 230 S. C. 532, 96 S. E. 2d 566,^[6] that the issue of immunity should be decided by the judge and not by the jury. That was a negligence action brought in the state trial court against a store owner by an employee of an independent contractor who operated the store's millinery department. The trial judge denied the store owner's motion for a directed verdict made upon the ground that § 72-111 barred the plaintiff's action. The jury returned a verdict for the plaintiff. The South Carolina Supreme Court reversed, holding that it was for the judge and not the jury to decide on the evidence whether the owner was a statutory employer, and that the store owner had sustained his defense. The court rested its holding on decisions, listed in footnote 8, infra, involving judicial review of the Industrial Commission and said:

"Thus the trial court should have in this case resolved the conflicts in the evidence and determined the fact of whether . . . [the independent contractor] was performing a part of the `trade, business or occupation' of the department store-appellant and, therefore, whether . . . [the employee's] remedy is exclusively under the Workmen's Compensation Law." 230 S. C., at 543, 96 S. E. 2d, at 572.

The respondent argues that this state-court decision governs the present diversity case and "divests the jury of its normal function" to decide the disputed fact question of the respondent's immunity under § 72-111. This is to contend that the federal court is bound under Erie R. Co. v. Tompkins, 304 U. S. 64, to follow the state court's holding to secure uniform enforcement of the immunity created by the State.^[7]

[535] First. It was decided in Erie R. Co. v. Tompkins that the federal courts in diversity cases must respect the definition of state-created rights and obligations by the state courts. We must, therefore, first examine the rule in Adams v. Davison-Paxon Co. to determine whether it is bound up with these rights and obligations in such a way that its application in the federal court is required. Cities Service Oil Co. v. Dunlap, 308 U. S. 208.

The Workmen's Compensation Act is administered in South Carolina by its Industrial Commission. The South Carolina courts hold that, on judicial review of actions of the Commission under § 72-111, the question whether the claim of an injured workman is within the Commission's jurisdiction is a matter of law for decision by the court, which makes its own findings of fact relating to that jurisdiction.^[8] The South Carolina Supreme Court states no reasons in Adams v. Davison-Paxon Co. why, although the jury decides all other factual issues raised by the cause of action and defenses, the jury is displaced as to the factual issue raised by the affirmative defense under § 72-111. The decisions cited to support the holding are those listed in footnote 8, which are concerned solely with defining the scope and method of judicial review of the Industrial [536] Commission. A State may, of course, distribute the functions of its judicial machinery as it sees fit. The decisions relied upon, however, furnish no reason for selecting the judge rather than the jury to decide this single affirmative defense in the negligence action. They simply reflect a policy, cf. Crowell v. Benson, 285 U. S. 22, that administrative determination of "jurisdictional facts" should not be final but subject to judicial review. The conclusion is inescapable that the Adams holding is grounded in the practical consideration that the question had therefore come before the South Carolina courts from the Industrial Commission and the courts had become accustomed to deciding the factual issue of immunity without the aid of juries. We find nothing to suggest that this rule was announced as an integral part of the special relationship created by the statute. Thus the requirement appears to be merely a form and mode of enforcing the immunity, Guaranty Trust Co. v. York, 326 U. S. 99, 108, and not a rule intended to be bound up with the definition of the rights and obligations of the parties. The situation is therefore not analogous to that in Dice v. Akron, C. & Y. R. Co., 342 U. S. 359, where this Court held that the right to trial by jury is so substantial a part of the cause of action created by the Federal Employers' Liability Act that the Ohio courts could not apply, in an action under that statute, the Ohio rule that the question of fraudulent release was for determination by a judge rather than by a jury.

Second. But cases following Erie have evinced a broader policy to the effect that the federal courts should conform as near as may be—in the absence of other considerations —to state rules even of form and mode where the state rules may bear substantially on the question whether the litigation would come out one way in the federal court and another way in the state court if the federal [537] court failed to apply a particular local rule.^[9]E. g., Guaranty Trust Co. v. York, supra; Bernhardt v. Polygraphic Co., 350 U. S. 198. Concededly the nature of the tribunal which tries issues may be important in the enforcement of the parcel of rights making up a cause of action or defense, and bear significantly upon achievement of uniform enforcement of the right. It may well be that in the instant personal-injury case the outcome would be substantially affected by whether the issue of immunity is decided by a judge or a jury. Therefore, were "outcome" the only consideration, a strong case might appear for saying that the federal court should follow the state practice.

But there are affirmative countervailing considerations at work here. The federal system is an independent system for administering justice to litigants who properly invoke its jurisdiction. An essential characteristic of that system is the manner in which, in civil common-law actions, it distributes trial functions between judge and jury and, under the influence—if not the command^[10]—of the Seventh Amendment, assigns the decisions of disputed questions of fact to the jury. Jacob v. New York, 315 U. S. 752.^[11] The policy of uniform enforcement of state-created [538] rights and obligations, see, e. g., Guaranty Trust Co. v. York, supra, cannot in every case exact compliance with a state rule^[12]—not bound up with rights and obligations— which disrupts the federal system of allocating functions between judge and jury. Herron v. Southern Pacific Co., 283 U. S. 91. Thus the inquiry here is whether the federal policy favoring jury decisions of disputed fact questions should yield to the state rule in the interest of furthering the objective that the litigation should not come out one way in the federal court and another way in the state court.

We think that in the circumstances of this case the federal court should not follow the state rule. It cannot be gainsaid that there is a strong federal policy against allowing state rules to disrupt the judge-jury relationship in the federal courts. In Herron v. Southern Pacific Co., supra, the trial judge in a personal-injury negligence action brought in the District Court for Arizona on diversity grounds directed a verdict for the defendant when it appeared as a matter of law that the plaintiff was guilty of contributory negligence. The federal judge refused to be bound by a provision of the Arizona Constitution which made the jury the sole arbiter of the question [539] of contributory negligence.^[13] This Court sustained the action of the trial judge, holding that "state laws cannot alter the essential character or function of a federal court" because that function "is not in any sense a local matter, and state statutes which would interfere with the appropriate performance of that function are not binding upon the federal court under either the Conformity Act or the `rules of decision' Act." Id., at 94. Perhaps even more clearly in light of the influence of the Seventh Amendment, the function assigned to the jury "is an essential factor in the process for which the Federal Constitution provides." Id., at 95. Concededly the Herron case was decided before Erie R. Co. v. Tompkins, but even when Swift v. Tyson, 16 Pet. 1, was governing law and allowed federal courts sitting in diversity cases to disregard state decisional law, it was never thought that state statutes or constitutions were similarly to be disregarded. Green v. Neal's Lessee, 6 Pet. 291. Yet Herron held that state statutes and constitutional provisions could not disrupt or alter the essential character or function of a federal court.^[14]

Third. We have discussed the problem upon the assumption that the outcome of the litigation may be substantially affected by whether the issue of immunity is decided by a judge or a jury. But clearly there is not present here the certainty that a different result would follow, cf. Guaranty Trust Co. v. York, supra, or even the strong possibility that this would be the case, cf. Bernhardt v. [540] Polygraphic Co., supra. There are factors present here which might reduce that possibility. The trial judge in the federal system has powers denied the judges of many States to comment on the weight of evidence and credibility of witnesses, and discretion to grant a new trial if the verdict appears to him to be against the weight of the evidence. We do not think the likelihood of a different result is so strong as to require the federal practice of jury determination of disputed factual issues to yield to the state rule in the interest of uniformity of outcome.^[15]

The Court of Appeals did not consider other grounds of appeal raised by the respondent because the ground taken disposed of the case. We accordingly remand the case to the Court of Appeals for the decision of the other questions, with instructions that, if not made unnecessary by the decision of such questions, the Court of Appeals shall remand the case to the District Court for a new trial of such issues as the Court of Appeals may direct.

Reversed and remanded.

MR. JUSTICE WHITTAKER, concurring in part and dissenting in part.

In 1936 the South Carolina Legislature passed an Act known as "The South Carolina Workmen's Compensation Law." S. C. Code, 1952, Tit. 72. It created a new, complete, detailed and exclusive plan for the compensation [541] by an "employer" of his "employee"^[16] for bodily injuries sustained by the latter which arise "by accident out of and in the course of the employment," whether with or without fault of the employer. § 72-14. The Act also prescribes the measure and nature of the remedy,^[17] which "shall exclude all other rights and remedies of such employee . . . against his employer, at common law or otherwise, on account of such injury" (§ 72-121), and vests exclusive jurisdiction in the South Carolina Industrial Commission over all claims falling within the purview of the Act (§ 72-66), subject to review by appeal to the State's courts upon "errors of law." § 72-356.

Section 72-111 expands the definition of the terms "employee" and "employer" (note 1) by providing, in substance, that when an " `owner' " of premises "undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person [called "subcontractor"] for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any workman employed in the work any compensation under this Title which he would have been liable to pay if the workman had been immediately employed by him." (Emphasis supplied.) Employees of such subcontractors are commonly called "statutory employees" of the "owner."

Petitioner, a lineman employed by a "subcontractor" who had contracted to build more than 25 miles of new transmission lines and to convert from single-phase to double-phase more than 87 miles of existing transmission lines and to construct two substations and a breaker station for the "owner," was severely injured by an accident [542] which arose out of and in the course of that employment. Subsequent to his injury he sought and received the full benefits provided by the South Carolina Workmen's Compensation Law.

Diversity existing, petitioner then brought this common-law suit in a Federal District Court in South Carolina against the "owner," the respondent here, for damages for his bodily injury, which, he alleged, had resulted from the "owner's" negligence. The respondent-"owner" answered setting up, among other defenses, the affirmative claim that petitioner's injury arose by accident out of and in the course of his employment, as a lineman, by the subcontractor while executing the contracted work "which [was] a part of [the owner's] trade, business or occupation." It urged, in consequence, that petitioner was its "statutory employee" and that, therefore, his exclusive remedy was under the South Carolina Workmen's Compensation Law, and that exclusive jurisdiction of the subject matter of his claim was vested in the State's Industrial Commission and, hence, the federal court lacked jurisdiction over the subject matter of this common-law suit.

At the trial petitioner adduced evidence upon the issue of negligence and rested his case in chief. Thereupon respondent, in support of its affirmative defense, adduced evidence tending to show (1) that its charter, issued under the Rural Electric Cooperative Act of South Carolina (S. C. Code, 1952, § 12-1025), authorized it to construct and operate electric generating plants and transmission lines essential to its business of generating and distributing electricity; (2) that it had (before the Second World War) constructed substations with its own direct employees and facilities, although the six substations which it was operating at the time petitioner was injured had been built by contractors, and that when [543] petitioner was injured it did not have in its direct employ any person capable of constructing a substation;^[18] (3) that it regularly employed a crew of 16 men—8 linemen and 8 groundmen—two-thirds of whose time was spent in constructing new transmission lines and extensions, and that such was "a part of [its] trade, business [and] occupation." This evidence stood undisputed when respondent rested its case.

At the close of respondent's evidence petitioner moved to strike respondent's affirmative jurisdictional defense, and all evidence adduced in support of it. Respondent made known to the court that when petitioner had rested it wished to move for a directed verdict in its favor. Thereupon the colloquy between the court and counsel, which is set forth in substance in MR. JUSTICE FRANKFURTER'S dissenting opinion, occurred. The District Court sustained petitioner's motion and struck respondent's affirmative jurisdictional defense and its supporting evidence from the record. His declared basis for that action was that the phrase in § 72-111 "a part of his trade, business or occupation" related only to work being performed by the "owner" "for somebody else." Thereafter, [544] the district judge heard arguments upon and overruled respondent's motion for a directed verdict,^[19] and submitted the case to the jury which returned a verdict for petitioner.

On appeal, the Court of Appeals found that the district judge's construction of § 72-111 was not supportable under controlling South Carolina decisions. It further found that respondent's evidence disclosed that respondent "was not only in the business of supplying electricity to rural communities, but [was] also in the business of constructing the lines and substations necessary for the distribution of the product," and that the contracted work was of like nature and, hence, was "a part of [respondent's] trade, business or occupation," within the meaning of § 72-111, and, therefore, petitioner was respondent's statutory employee, and, hence, the court was without jurisdiction over the subject matter of the claim. Upon this basis, it reversed the judgment of the District Court with directions to enter judgment for respondent. 238 F. 2d 346.

This Court now vacates the judgment of the Court of Appeals and remands the case to it for decision of questions not reached in its prior opinion, with directions, if not made unnecessary by its decision of such questions, to remand the case to the District Court for a new trial upon such issues as the Court of Appeals may direct.

I agree with and join in that much of the Court's opinion. I do so because—although, as found by the [545] Court of Appeals, respondent's evidence was ample, prima facie, to sustain its affirmative jurisdictional defense— petitioner had not waived his right to adduce evidence in rebuttal upon that issue, in other words had not "rested," at the time the district judge erroneously struck respondent's jurisdictional defense and supporting evidence from the record. In these circumstances, I believe that the judgment of the Court of Appeals, insofar as it directed the District Court to enter judgment for respondent, would deprive petitioner of his legal right, which he had not waived, to adduce evidence which he claims to have and desires to offer in rebuttal of respondent's prima facie established jurisdictional defense. The procedural situation then existing was not legally different from a case in which a defendant, without resting, moves, at the close of the plaintiff's case, for a directed verdict in its favor which the court erroneously sustains, and, on appeal, is reversed for that error. It could not fairly be contended, in those circumstances, that the appellate court might properly direct the trial court to enter judgment for the plaintiff and thus deprive the defendant, who had not rested, of his right to offer evidence in defense of plaintiff's case. Rule 50, Fed. Rules Civ. Proc. It is urged by respondent that, from the colloquy between the district judge and counsel, which, as stated, is set forth in substance in MR. JUSTICE FRANKFURTER'S dissenting opinion, it appears that petitioner had "rested," and thus had waived his right to adduce rebuttal evidence upon the issue of respondent's jurisdictional defense, before the district judge sustained his motion to strike that defense and the supporting evidence. But my analysis of the record convinces me that petitioner, in fact, never did so. For this reason I believe that so much of the judgment of the Court of Appeals as directed the District Court to enter judgment for respondent deprives petitioner of his right to adduce rebuttal evidence upon the [546] issue of respondent's prima facie established jurisdictional defense, and, therefore, cannot stand.

But the Court's opinion proceeds to discuss and determine the question whether, upon remand to the District Court, if such becomes necessary, the jurisdictional issue is to be determined by the judge or by the jury—a question which, to my mind, is premature, not now properly before us, and is one we need not and should not now reach for or decide. The Court, although premising its conclusion "upon the assumption that the outcome of the litigation may be substantially affected by whether the issue of immunity^[20] is decided by a judge or a jury." holds that the issue is to be determined by a jury—not by the judge. I cannot agree to this conclusion for the following reasons.

As earlier shown, the South Carolina Workmen's Compensation Law creates a new, complete, detailed and exclusive bundle of rights respecting the compensation by an "employer" of his "employee" for bodily injuries sustained by the latter which arise by accident out of and in the course of the employment, regardless of fault, and vests exclusive jurisdiction in the State's Industrial Commission over all such claims, subject to review by appeal in the South Carolina courts only upon "errors of law." Consonant with § 72-66, which vests exclusive jurisdiction over such claims in the Commission, and with § 72-356, which allows judicial review only upon "errors of law," the Supreme Court of the State has uniformly held that the question, in cases like the present, whether [547] jurisdiction over such claims is vested in the Industrial Commission or in the courts presents a question of law for determination by the court, not a jury. In Adams v. Davison-Paxon Co., 230 S. C. 532, 96 S. E. 2d 566 (1957), which appears to be the last case by the Supreme Court of the State on the question, plaintiff, an employee of a concessionaire operating the millinery department in defendant's store, was injured, she claimed by negligence, while using a stairway in the store. She brought a common-law suit for damages against the owner of the store. The latter defended upon the ground, among others, that the operation of the millinery department, though under a contract with the concessionaire, plaintiff's employer, was "a part of [its] trade, business or occupation," that the plaintiff was therefore its statutory employee under § 72-111 and exclusive jurisdiction over the subject matter of plaintiff's claim was vested in the Industrial Commission, and that the court was without jurisdiction over the subject matter in her common-law suit. It seems that the trial court submitted this issue, along with others, to the jury which returned a verdict for plaintiff. On appeal the Supreme Court of the State reversed, saying:

"It has been consistently held that whether the claim of an injured workman is within the jurisdiction of the Industrial Commission is a matter of law for decision by the Court, which includes the finding of the facts which relate to jurisdiction. Knight v. Shepherd, 191 S. C. 452, 4 S. E. (2d) 906; Tedars v. Savannah River Veneer Company, 202 S. C. 363, 25 S. E. (2d) 235, 147 A. L. R. 914; McDowell v. Stilley Plywood Co., 210 S. C. 173, 41 S. E. (2d) 872; Miles v. West Virginia Pulp & Paper Co., 212 S. C. 424, 48 S. E. (2d) 26; Watson v. Wannamaker & Wells, Inc., 212 S. C. 506, 48 S. E. (2d) 447; Gordon v. Hollywood-Beaufort Package Corp., 213 S. C. 438, [548] 49 S. E. (2d) 718; Holland v. Georgia Hardwood Lbr. Co., 214 S. C. 195, 51 S. E. (2d) 744; Younginer v. J. A. Jones Const. Co., 215 S. C. 135, 54 S. E. (2d) 545; Horton v. Baruch, 217 S. C. 48, 59 S. E. (2d) 545.

"Thus the trial court should have in this case resolved the conflicts in the evidence and determined the fact of whether Emporium [the concessionaire] was performing a part of the `trade, business or occupation' of the department store-appellant and, therefore, whether respondent's remedy is exclusively under the Workmen's Compensation Law." 230 S. C., at 543, 96 S. E. 2d, at 571. (Emphasis supplied.)

It thus seems to be settled under the South Carolina Workmen's Compensation Law, and the decisions of the highest court of that State construing it, that the question whether exclusive jurisdiction, in cases like this, is vested in its Industrial Commission or in its courts of general jurisdiction is one for decision by the court, not by a jury. The Federal District Court, in this diversity case, is bound to follow the substantive South Carolina law that would be applied if the trial were to be held in a South Carolina court, in which State the Federal District Court sits. Erie R. Co. v. Tompkins, 304 U. S. 64. A Federal District Court sitting in South Carolina may not legally reach a substantially different result than would have been reached upon a trial of the same case "in a State court a block away." Guaranty Trust Co. v. York, 326 U. S. 99, 109.

The Court's opinion states: "Concededly the nature of the tribunal which tries issues may be important in the enforcement of the parcel of rights making up a cause of action or defense, and bear significantly upon achievement of uniform enforcement of the right. It may well be that in the instant personal-injury case the outcome [549] would be substantially affected by whether the issue of immunity is decided by a judge or a jury." And the Court premises its conclusion "upon the assumption that the outcome of the litigation may be substantially affected by whether the issue of immunity is decided by a judge or a jury." Upon that premise, the Court's conclusion, to my mind, is contrary to our cases. "Here [as in Guaranty Trust Co. v. York, supra] we are dealing with a right to recover derived not from the United States but from one of the States. When, because the plaintiff happens to be a non-resident, such a right is enforceable in a federal as well as in a State court, the forms and mode of enforcing the right may at times, naturally enough, vary because the two judicial systems are not identic. But since a federal court adjudicating a State-created right solely because of the diversity of citizenship of the parties is for that purpose, in effect, only another court of the State, it cannot afford recovery if the right to recover is made unavailable by the State nor can it substantially affect the enforcement of the right as given by the State." Guaranty Trust Co. v. York, supra, at 108-109. (Emphasis supplied.)

The words "substantive" and "procedural" are mere conceptual labels and in no sense talismanic. To call a legal question by one or the other of those terms does not resolve the question otherwise than as a purely authoritarian performance. When a question though denominated "procedural" is nevertheless so "substantive" as materially to affect the result of a trial, federal courts, in enforcing state-created rights, are not free to disregard it, on the ground that it is "procedural," for such would be to allow, upon mere nomenclature, a different result in a state court from that allowable in a federal court though both are, in effect, courts of the State and "sitting side by side." Klaxon Co. v. Stentor Co., 313 U. S. 487, 496. "The federal court enforces the state-created right [550] by rules of procedure which it has acquired from the Federal Government and which therefore are not identical with those of the state courts. Yet, in spite of that difference in procedure, the federal court enforcing a state-created right in a diversity case is, as we said in Guaranty Trust Co. v. York, 326 U. S. 99, 108, in substance `only another court of the State.' The federal court therefore may not `substantially affect the enforcement of the right as given by the State.' Id., 109." Bernhardt v. Polygraphic Co., 350 U. S. 198, 202-203. (Emphasis supplied.) "Where local law qualifies or abridges [the right], 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 R. Co. v. Tompkins is transgressed." Ragan v. Merchants Transfer Co., 337 U. S. 530, 533. "It is therefore immaterial whether [state-created rights] are characterized either as `substantive' or `procedural' in State court opinions in any use of those terms unrelated to the specific issue before us. Erie R. Co. v. Tompkins was not an endeavor to formulate scientific legal terminology. It expressed a policy that touches vitally the proper distribution of judicial power between State and federal courts. In essence, the intent of that decision was to insure that, in all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court. The nub of the policy that underlies Erie R. Co. v. Tompkins is that for the same transaction the accident of a suit by a non-resident litigant in a federal court instead of in a State court a block away should not lead to a substantially different result. And so, putting to one side abstractions regarding `substance' and `procedure,' we have held that in diversity cases the federal [551] courts must follow the law of the State . . . ." Guaranty Trust Co. v. York, supra, at 109. (Emphasis supplied.)

Inasmuch as the law of South Carolina, as construed by its highest court, requires its courts—not juries—to determine whether jurisdiction over the subject matter of cases like this is vested in its Industrial Commission, and inasmuch as the Court's opinion concedes "that in the instant personal-injury case the outcome would be substantially affected by whether the issue of immunity is decided by a judge or a jury," it follows that in this diversity case the jurisdictional issue must be determined by the judge—not by the jury. Insofar as the Court holds that the question of jurisdiction should be determined by the jury, I think the Court departs from its past decisions. I therefore respectfully dissent from part II of the opinion of the Court.

MR. JUSTICE FRANKFURTER, whom MR. JUSTICE HARLAN joins, dissenting.

This is a suit for common-law negligence, brought in a United States District Court in South Carolina because of diversity of citizenship, 28 U. S. C. § 1332. Respondent is a cooperative, organized and operating under the South Carolina Rural Electric Cooperative Act, S. C. Code, 1952, § 12-1001 et seq., engaged in distributing electric power to its members, and extending the availability of power to new users, in rural areas of the State. Incident to the expansion of its facilities and services, it had made a contract with R. H. Bouligny, Inc., whereby the latter was to construct 24.19 miles of new power lines, to rehabilitate and convert to higher capacity 87.69 miles of existing lines, and to construct two substations and a breaker station. In the execution of this contract, petitioner, a citizen of North Carolina, and a lineman for Bouligny, was seriously burned when he attempted to make a connection between the equipment in one of the [552] new substations and an outside line through which, by a mistake on the part of another of Bouligny's employees, current was running. Petitioner filed a claim against Bouligny pursuant to the South Carolina Workmen's Compensation Law, S. C. Code, 1952, § 72-1 et seq., under which both Bouligny and respondent operated, and recovered the full benefits under the Law. He then brought this suit.

Respondent defended on the ground, among others, that, since petitioner was injured in the execution of his true employer's (Bouligny's) contract with respondent to perform a part of its "trade, business or occupation," respondent was petitioner's "statutory employer" and therefore liable to petitioner under § 72-111 of the State's Workmen's Compensation Law.^[21] It would follow from this that petitioner, by virtue of his election to proceed against Bouligny, was barred from proceeding against respondent, either under the statute or at common law (§§ 72-121, 72-123).^[22] After all the evidence was in, the [553] court granted petitioner's motion to strike the defense, on the ground that an activity could not be a part of a firm's "trade, business or occupation" unless it was being performed "for somebody else." The court also denied respondent's motion for a directed verdict and submitted the case to the jury, which returned a verdict for petitioner in the amount of $126,786.80.

On appeal, the United States Court of Appeals for the Fourth Circuit found the District Court's construction of § 72-111 unsupportable under controlling South Carolina decisions.^[23] In concluding that respondent had sustained its defense, the appellate court cited the following evidence elicited at trial. Respondent employed a sixteen-man "outside crew," two-thirds of whose time was spent in such construction work as building new power lines and extensions; since World War II the demand for electrical service had been so great that independent contractors had to be employed to do much of the necessary construction work. All of respondent's construction work, regardless of who was actually performing it, was done under the supervision of an engineering firm with which respondent has an engineering service contract. Testimony as to the construction of substations was not altogether consistent; however, stated most favorably to petitioner—and that is the light in which the Court of Appeals considered it—that evidence was to the effect [554] that respondent had with its own facilities constructed three substations, although it had built none of the six it was operating at the time petitioner was injured, nor was respondent at that time employing personnel capable of constructing substations. The construction work in connection with which petitioner was injured was clearly among the functions respondent was empowered to perform by the statute under which it was organized; moreover, this construction was necessary to the discharge of respondent's duty to serve the area in which it operated. Finally, respondent was the "main actor" in this particular construction project: it secured the necessary financing; its consulting engineer prepared the plans (approved by respondent) and supervised the construction; it purchased the materials of which the substations were constructed; it had the responsibility of de-energizing and re-energizing existing lines that were involved in the work. From this evidence the Court of Appeals was satisfied that "there can be no doubt that Blue Ridge was not only in the business of supplying electricity to rural communities, but also in the business of constructing the lines and substations necessary for the distribution of the product," 238 F. 2d 346, 351. The Court of Appeals, having concluded that respondent's defense should have been sustained, directed the District Court to enter judgment for the respondent. The District Court had decided the question of whether or not respondent was a statutory employer without submitting it to the jury. It is not altogether clear whether it did so because it thought it essentially a nonjury issue, as it is in the South Carolina courts under Adams v. Davison-Paxon Co., 230 S. C. 532, 96 S. E. 2d 566, or because there was no controverted question of fact to submit to the jury.

The construction of the state law by the Court of Appeals is clearly supported by the decisions of the Supreme Court of South Carolina, and so we need not rest on the [555] usual respect to be accorded to a reading of a local statute by a Federal Court of Appeals. Estate of Spiegel v. Commissioner, 335 U. S. 701, 708. It is clear from the state cases that a determination as to whether a defendant is an "employer" for purposes of § 72-111 will depend upon the entire circumstances of the relationship between such defendant and the work being done on its behalf; no single factor is determinative. Both the approach of the Court of Appeals and the conclusions that it reached from the evidence in this case are entirely consistent with prior declarations of South Carolina law by the highest court of that State.^[24]

In holding respondent a statutory employer, the Court of Appeals was giving the South Carolina Workmen's Compensation Law the liberal construction called for by the Supreme Court of that State. In Yeomans v. Anheuser-Busch, Inc., 198 S. C. 65, 72, 15 S. E. 2d 833, 835, that court said:

"[T]he basic purpose of the Compensation Act is the inclusion of employers and employees, and not their exclusion; and we add that doubts of jurisdiction must be resolved in favor of inclusion rather than exclusion."

It would be short-sighted to overlook the fact that exclusion of an employer in a specific case such as this one [556] might well have the consequence of denying any recovery at all to other employees vis-a-vis this employer and other similarly situated. The Court of Appeals, through the experienced Judge Soper, recognized the short-sighted illiberality of yielding to the temptation of allowing a single recovery for negligence to stand and do violence to the consistent and legislatively intended interpretation of the statute in Berry v. Atlantic Greyhound Lines, 114 F. 2d 255, 257:

"It may well be, and possibly this is true in the instant case, that sometimes a recovery might be had in a common law action for an amount much larger than the amount which would be received under a Compensation Act. This, though, is more than balanced by the many advantages accorded to an injured employee in a proceeding under a Compensation Act which would not be found in a common law action."

When, after the evidence was in, petitioner moved to strike respondent's defense based on § 72-111, the following colloquy ensued:

"The Court: In the event I overrule your motion, do you contemplate putting up any testimony in reply? You have that right, of course. On this point, I mean.

"Mr. Hammer [petitioner's counsel]: We haven't discussed it, but we are making that motion. I frankly don't know at this point of any reply that is necessary. I don't know of any evidence in this case—

.....

"The Court: The reason I am making that inquiry as to whether you intend to put up any more testimony in the event I overrule your motion, counsel [557] may wish to move for a directed verdict on that ground since it is a question of law. But that is his prerogative after all the evidence is in. Of course, he can't move for a directed verdict as long as you have a right to reply.

"Mr. Hammer: We are moving at this time in the nature of a voluntary dismissal.

"The Court: You move to dismiss that defense?

"Mr. Hammer: Yes, sir, at this stage of the game."

After argument by counsel, the court made its ruling, granting petitioner's motion. Respondent having indicated its intention to move for a directed verdict, the court then said, "I will allow you to include in that Motion for Directed Verdict your defense which I have stricken, if you desire. . . ." Respondent's motion was overruled.

It is apparent that petitioner had no intention of introducing any evidence on the issue of whether respondent was his statutory employer and that he was prepared to—and did—submit the issue to the court on that basis. Clearly petitioner cannot be said to have relied upon, and thus to have been misled by, the court's erroneous construction of the law, for it was before the court had disclosed its view of the law that petitioner made apparent his willingness to submit the issue to it on the basis of respondent's evidence. If petitioner could have cast any doubt on that evidence or could have brought in any other matter relevant to the issue, it was his duty to bring it forward before the issue was submitted to the court. For counsel to withhold evidence on an issue submitted for decision until after that issue has been resolved against him would be an abuse of the judicial process that this Court surely should not countenance, however strong the philanthropic appeal in a particular case. Nor does [558] it appear that petitioner had any such "game" in mind. He gave not the slightest indication of an intention to introduce any additional evidence, no matter how the court might decide the issue. It seems equally clear that, had the trial court decided the issue—on any construction —in favor of the respondent, the petitioner was prepared to rely solely upon his right of appeal.

We are not to read the record as though we are making an independent examination of the trial proceedings. We are sitting in judgment on the Court of Appeals' review of the record. That court, including Chief Judge Parker and Judge Soper, two of the most experienced and esteemed circuit judges in the federal judiciary, interpreted the record as it did in light of its knowledge of local practice and of the ways of local lawyers. In ordering judgment entered for respondent, it necessarily concluded, as a result of its critical examination of the record, that petitioner's counsel chose to have the issue decided on the basis of the record as it then stood. The determination of the Court of Appeals can properly be reversed only if it is found that it was baseless. Even granting that the record is susceptible of two interpretations, it is to disregard the relationship of this Court of the Courts of Appeals, especially as to their function in appeals in diversity cases, to substitute our view for theirs.

The order of the Court of Appeals that the District Court enter judgment for the respondent is amply sustained on either theory as to whether or not the issue was one for the court to decide. If the question is for the court, the Court of Appeals has satisfactorily resolved it in accordance with state decisions. And if, on the other hand, the issue is such that it would have to be submitted to the jury if there were any crucial facts in controversy, both the District Court and the Court of Appeals agreed that there was no conflict as to the relevant [559] evidence—not, at any rate, if such inconsistency as existed was resolved in favor of petitioner. According to the governing view of South Carolina law, as given us by the Court of Appeals, that evidence would clearly have required the District Court to grant a directed verdict to the respondent. Accordingly, I would affirm the judgment.

MR. JUSTICE HARLAN, dissenting.

I join in MR. JUSTICE FRANKFURTER'S dissenting opinion, but desire to add two further reasons why I believe the judgment of the Court of Appeals should be affirmed. As I read that court's opinion, it held that under South Carolina law the construction of facilities needed to transmit electric power was necessarily a part of the business of furnishing power, whether such construction was performed by the respondent itself or let out to others, and that in either case respondent would be liable to petitioner for compensation as his statutory employer. Since there is no dispute that respondent at the time of the accident was engaged in the business of furnishing power and that petitioner was injured while engaged in construction in furtherance of that business, I do not perceive how any further evidence which might be adduced by petitioner could change the result reached by the Court of Appeals. In any event, in the circumstances disclosed by the record before us, we should at the very least require petitioner to make some showing here of the character of the further evidence he expects to introduce before we disturb the judgment below.

[1] S. C. Code, 1952, provides:

"§ 72-111. Liability of owner to workmen of subcontractor.

"When any person, in this section and §§ 72-113 and 72-114 referred to as `owner,' undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (in this section and §§ 72-113 to 72-116 referred to as `subcontractor') for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any workman employed in the work any compensation under this Title which he would have been liable to pay if the workman had been immediately employed by him."

"§ 72-121. Employees' rights under Title exclude all others against employer.

"The rights and remedies granted by this Title to an employee when he and his employer have accepted the provisions of this Title, respectively, to pay and accept compensation on account of personal injury or death by accident, shall exclude all other rights and remedies of such employee, his personal representative, parents, dependents or next of kin as against his employer, at common law or otherwise, on account of such injury, loss of service or death."

"§ 72-123. Only one remedy available.

"Either the acceptance of an award under this Title or the procurement and collection of a judgment in an action at law shall be a bar to proceeding further with the alternate remedy."

[2] In earlier proceedings the case was dismissed on the ground that the respondent, a nonprofit corporation, was immune from tort liability under South Carolina law. 118 F. Supp. 868. The Court of Appeals reversed and remanded the case for trial. 215 F. 2d 542.

[3] The trial judge, in spite of his action striking the defense, permitted the respondent to include the affirmative defense as a ground of its motions for a directed verdict and judgment non obstante veredicto.

[4] S. C. Code, 1952, § 12-1025.

[5] The only remarks thereafter made by the petitioner's counsel reiterated his statement that he pressed his motion to dismiss the affirmative defense.

[6] The decision came down several months after the Court of Appeals decided this case.

[7] See Cities Service Oil Co. v. Dunlap, 308 U. S. 208; West v. American Tel. & Tel. Co., 311 U. S. 223; Klaxon Co. v. Stentor Co., 313 U. S. 487; Guaranty Trust Co. v. York, 326 U. S. 99; Angel v. Bullington, 330 U. S. 183; Ragan v. Merchants Transfer Co., 337 U. S. 530; Woods v. Interstate Realty Co., 337 U. S. 535; Cohen v. Beneficial Loan Corp., 337 U. S. 541; Bernhardt v. Polygraphic Co., 350 U. S. 198; Sampson v. Channell, 110 F. 2d 754.

[8] Knight v. Shepherd, 191 S. C. 452, 4 S. E. 2d 906; Tedars v. Savannah River Veneer Co., 202 S. C. 363, 25 S. E. 2d 235; McDowell v. Stilley Plywood Co., 210 S. C. 173, 41 S. E. 2d 872; Miles v. West Virginia Pulp & Paper Co., 212 S. C. 424, 48 S. E. 2d 26; Watson v. Wannamaker & Wells, Inc., 212 S. C. 506, 48 S. E. 2d 447; Gordon v. Hollywood-Beaufort Package Corp., 213 S. C. 438, 49 S. E. 2d 718; Holland v. Georgia Hardwood Lumber Co., 214 S. C. 195, 51 S. E. 2d 744; Younginer v. Jones Construction Co., 215 S. C. 135, 54 S. E. 2d 545; Horton v. Baruch, 217 S. C. 48, 59 S. E. 2d 545.

[9] Cf. Morgan, Choice of Law Governing Proof, 58 Harv. L. Rev. 153; 3 Beale, Conflict of Laws, § 594.1; Restatement of the Law, Conflict of Laws, pp. 699-701.

[10] Our conclusion makes unnecessary the consideration of—and we intimate no view upon—the constitutional question whether the right of jury trial protected in federal courts by the Seventh Amendment embraces the factual issue of statutory immunity when asserted, as here, as an affirmative defense in a common-law negligence action.

[11] The Courts of Appeals have expressed varying views about the effect of Erie R. Co. v. Tompkins on judge-jury problems in diversity cases. Federal practice was followed in Gorham v. Mutual Benefit Health & Accident Assn., 114 F. 2d 97 (C. A. 4th Cir. 1940); Diederich v. American News Co., 128 F. 2d 144 (C. A. 10th Cir. 1942); McSweeney v. Prudential Ins. Co., 128 F. 2d 660 (C. A. 4th Cir. 1942); Ettelson v. Metropolitan Life Ins. Co., 137 F. 2d 62 (C. A. 3d Cir. 1943); Order of United Commercial Travelers v. Duncan, 221 F. 2d 703 (C. A. 6th Cir. 1955). State practice was followed in Cooper v. Brown, 126 F. 2d 874 (C. A. 3d Cir. 1942); Gutierrez v. Public Service Interstate Transportation Co., 168 F. 2d 678 (C. A. 2d Cir. 1948); Prudential Ins. Co. v. Glasgow, 208 F. 2d 908 (C. A. 2d Cir. 1953); Pierce Consulting Engineering Co. v. City of Burlington, 221 F. 2d 607 (C. A. 2d Cir. 1955); Rowe v. Pennsylvania Greyhound Lines, 231 F. 2d 922 (C. A. 2d Cir. 1956).

[12] This Court held in Sibbach v. Wilson & Co., 312 U. S. 1, that Federal Rules of Civil Procedure 35 should prevail over a contrary state rule.

[13] "The defense of contributory negligence or of assumption of risk shall, in all cases whatsoever, be a question of fact and shall, at all times, be left to the jury." § 5, Art. 18.

[14] Diederich v. American News Co., 128 F. 2d 144, decided after Erie R. Co. v. Tompkins, held that an almost identical provision of the Oklahoma Constitution was not binding on a federal judge in a diversity case.

[15] Stoner v. New York Life Ins. Co., 311 U. S. 464, is not contrary. It was there held that the federal court should follow the state rule defining the evidence sufficient to raise a jury question whether the state-created right was established. But the state rule did not have the effect of nullifying the function of the federal judge to control a jury submission as did the Arizona constitutional provision which was denied effect in Herron. The South Carolina rule here involved affects the jury function as the Arizona provision affected the function of the judge: The rule entirely displaces the jury without regard to the sufficiency of the evidence to support a jury finding of immunity.

[16] The terms "employee" and "employer" are conventionally defined in §§ 72-11 and 72-12.

[17] S. C. Code, 1952, c. 4, §§ 72-151 to 72-165.

[18] As I see it, the evidence referred to in "(1)" is only collaterally material, and that referred to in "(2)" is wholly immaterial, to the issue of whether petitioner was respondent's statutory employee at the time of the injury, because that question, under the South Carolina Workmen's Compensation Law, does not depend upon what particular trade, business or occupation the "owner" lawfully might pursue, or lawfully might have pursued in the past. Rather, it depends upon what work he is engaged in at the time of the injury—i. e., whether the contracted work "is a part of [the owner's] trade, business or occupation." The statute thus speaks in the present tense, and, hence, the relevant inquiry here is limited to whether the work being done by petitioner for the "owner" at the time of the injury was a part of the trade, business, or occupation of the "owner" at that time.

[19] The Court's opinion and MR. JUSTICE FRANKFURTER'S dissent comment upon the fact that the district judge stated to respondent's counsel that he would "allow" him to include in his motion for a directed verdict the affirmative jurisdictional defense which had just been stricken. To my mind this is wholly without significance, for the district judge was without power to control what points and arguments respondent's counsel might urge in support of his motion for a directed verdict.

[20] Here, as at other places in its opinion, the Court treats with the South Carolina Workmen's Compensation Law as an "immunity" of the employer from liability. To me, the question is not one of immunity. Rather, it is which of two tribunals—the Industrial Commission or the court of general jurisdiction—has jurisdiction, to the exclusion of the other, over the subject matter of the action, and, hence, the power to award relief upon it.

[21] 

"§ 72-111. Liability of owner to workmen of subcontractor.

"When any person, in this section and §§ 72-113 and 72-114 referred to as `owner,' undertakes to perform or execute any work which is a part of his trade, business or occupation and contracts with any other person (in this section and §§ 72-113 to 72-116 referred to as `subcontractor') for the execution or performance by or under such subcontractor of the whole or any part of the work undertaken by such owner, the owner shall be liable to pay to any workman employed in the work any compensation under this Title which he would have been liable to pay if the workman had been immediately employed by him."

[22]

"§ 72-121. Employee's rights under Title exclude all others against employer.

"The rights and remedies granted by this Title to an employee when he and his employer have accepted the provisions of this Title, respectively, to pay and accept compensation on account of personal injury or death by accident, shall exclude all other rights and remedies of such employee, his personal representative, parents, dependents or next of kin as against his employer, at common law or otherwise, on account of such injury, loss of service or death.

.....

"§ 72-123. Only one remedy available.

"Either the acceptance of an award under this Title or the procurement and collection of a judgment in an action at law shall be a bar to proceeding further with the alternate remedy."

[23] It may be noted that not even petitioner's counsel supports the trial court's theory regarding the South Carolina Workmen's Compensation Law.

[24] For example, whether or not the defendant had ever itself performed the work contracted out has not been thought to be a conclusive criterion. In fact, in Boseman v. Pacific Mills, 193 S. C. 479, 8 S. E. 2d 878, the court rejected the defendant's contention that, because it had never performed the work in question, it could not be held an employer. See also Hopkins v. Darlington Veneer Co., 208 S. C. 307, 38 S. E. 2d 4; Kennerly v. Ocmulgee Lumber Co., 206 S. C. 481, 34 S. E. 2d 792. Nor is the question whether or not the accomplishment of the work involved requires specialized skill determinative. See Marchbanks v. Duke Power Co., 190 S. C. 336, 2 S. E. 2d 825.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Reversed.

MR. JUSTICE BLACK concurs in the result.

MR. JUSTICE HARLAN, concurring.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

MR. JUSTICE MARSHALL delivered the opinion of the Court.

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

I

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

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

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

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

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

II

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

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

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

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

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

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

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

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

III

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

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

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

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

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

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

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

The judgment of the Court of Appeals is

Affirmed.

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

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

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

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

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

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

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

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

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

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

The Note of the Advisory Committee on the Rules states:

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

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

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

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

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

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

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

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

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

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

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

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

I

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

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

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

II

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

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

[28] III

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

A

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

B

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

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

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

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

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

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

It is so ordered.

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

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

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

JUSTICE SCALIA, dissenting.

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

[34] I

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

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

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

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

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

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

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

II

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

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

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

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

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

For the reasons stated, I respectfully dissent.

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

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

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

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

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

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

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

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

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

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

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

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

11 So. 803
97 Ala. 126 - 1892

Alabama Great Southern Rail Road Co.
v.
Carroll.

[126] Action by Employe for Injuries Sustained in Another State.

1. Negligence of fellow-Servant not cause of action against master at common-law.–Underthe common-law, both in Alabama and Mississippi, the master is not liable for an injury inflicted through the negligence of a fellow-servant.

2. Section 2590 of the Code has no extra territorial operation.—There can be no recovery in Alabama for injuries to the person sustained in another State, unless actionable by the law of the State where received, and this rule is not varied because the negligence which produced the casualty transpired in Alabama, where the common-law liability of the master is modified, nor by the facts that both master and employee reside in this State and services were required of the employee in both States.

3. Section 2590 imposes no contractual obligations.– The liability of the employer under Section 2590 of the Code, does not spring from the contract of employment, the only office of which is to establish the relation of master and servant, and it is alone upon the incidents of that relation that the statute operates. Hence, a servant injured in another State by the negligence of a fellow-servant, under such circumstances as would create no right of action against the master in that State, cannot recover against the latter in Alabama, although the contract was entered into and the services partly performed here

Appeal from City Court of Birmingham. Tried before Hon. H. A. SHARPE.

J. W. FEWELL, and A. G. SMITH, for appellant.

That the action is not for breach of contract, nor for breach of duty growing out of contract.-R. R. Go. v. Doyle, 60 Miss. 977; A .T. & R. R. v. :Moore, 11 Am. & Eng. R. R. cases 243; LeForest v. Tolman, 19 Am. Rep. 400; McMaster v. R. R. Co., 65 Miss. 264; Davis v. N. Y. R. R. 143 Mass. 301; 33 Kan. 83; 98 N. Y. 377; 61 Iowa 441; 61 Tex. 432; 72 Ind. 220; 10 Ohio St. 121; E. T. V. & G. Rwy. v. Lewis, 14 S. W. Rep. 603; 23 N. Y. 465; 5 Am. & Eng. Encyc. 127; 3 lb. 522; 10 S. Rep. 661; 2 Thomp. on Neg. p. 1282.

BROOKS & BROOKS, for appellee, as to jurisdiction, cited Denw1ck v. R. R. Go. 103 U. S. 18; Knight v. R. R. Co. 108 Pa. St. 38; Am. Rep. 492; A. G. S. v. Thomas, 89 Ala. 293.

That the law is part of the contract, Hanrick v. Andrews, 9 Port. 9; McDougald v. Rutherford, 30 Ala. 253; Walker v Forbes, 31 Ala. 9; Brouqhton v. Bradley, 36 Ala. 689; Cubbedge v. Napier, 62 Ala. 518; 100 U . S . 213; 116 lb. 647; 3 Am. & Eng. Encyc. 545.

McCLELLAN, J.

The plaintiff W. D. Carroll is, and was [127] at the time of being injured in that service, a citizen of Alabama. The defendant is an Alabama corporation operating a railroad extending from Chattanooga in the State of Tennessee through Alabama to Meridian in the State Mississippi. At the time of the casualty complained of, plaintiff was in the service of the defendant in the capacity of brakeman on freight trains running from Birmingham, Alabama, to Meridian, Mississippi, under a contract which was made in the state of Alabama. The injury was caused by the breaking of a link between two cars in a freight train which was proceeding from Birmingham to Meridian. The point at which the link broke and the injury was suffered was in the State of Mississippi. The evidence tended to show that the link which broke was a defective link and that it was in a defective condition when the train left Birmingham. It was shown that this link, had come to the defendant's road at Chattanooga, Tennessee, with a car which belonged to and came to that point over a road which was foreign to the A.G.S. road. That at Chattanooga, this foreign car was coupled into a train of the defendant by means of this link, the destination of the car next in rear of it being Birmingham, and the destination of the second car in the rear of it, which belonged to defendant, being Meridian, to which point the foreign car was also bound. At Birmingham the car between this foreign car and the A.G.S. car which were billed to Meridian was cut out, and these two were coupled together by means of the link which had come to the defendant with the foreign car. The evidence went also to show that the defect in this link consisted in or resulted from its having been bent while cold, that this tended to weaken the iron and in this instance had cracked the link somewhat on the outer curve of the bend, and that the link broke at the point of this crack. It was shown to be the duty of certain employees of defendant stationed along its line to inspect the links attached to cars to be put in trains or forming the couplings between cars in trains at Chattanooga, Birmingham, and some points between Birmingham and the place where this link broke, and [128] also that it was the duty of the conductor of freight trains and the other train-men to maintain such inspection as occasion afforded throughout the runs or trips of such trains; and the evidence affords ground for inference that there was a negligent omission on the part of such employees to perform this duty, or if performed, the failure to discover the defect in and to remove this link was the result of negligence..

The foregoing statement of facts, either proved or finding lodgment in the tendencies of the evidence, together with. the evidence of the law of Mississippi, as to the master's liability for injuries sustained by an employee in his service, will suffice for the consideration and determination of the question which is of chief importance in this case, namely, whether the defendant is liable at all on the facts presented by this record for an injury sustained by the defendant in the State of Mississippi. The affirmative of this inquiry is sought to be rested and maintained upon two distinct propositions. In the first place, it is insisted that the. negligence which one aspect of the evidence tends to establish Is that of the defendant m respect of a duty which the law imposes upon the master and which whether performed or undertaken to be performed in the particular instance by the hand of the master or by the hand of one to whom he had delegated its performance is yet to be taken as being performed or attempted to be performed by the master himself, in such sort that the employer is responsible for its misperformance or non-performance whereby injury results to one of his employees under the doctrine of the common-law and wholly irrespective of statutory provisions. These doctrines are presumed, and also shown by the evidence in this case, to obtain in the State of Mississippi; and the defendant being an Alabama corporation it can­ not be questioned that an action may be maintained in this State to recover damages for an injury sustained in Mississippi, by one of its servants, if the facts present a good cause of action under the law of that State. It is manifest beyond adverse inference on the evidence, conceding the link, the breaking of which caused the accident, to have been in a defective condition when it came to defendant's road at Chattanooga attached to, and intended to be used in the further transportation, of the foreign car, that it was so used from that point to the place of the accident, that this defective condition of the link was patent to such observation as should have been bestowed upon it and that the defect in it was the proximate cause of the injury to the plaintiff, it [129] is, we say clear upon every aspect of the testimony, conceding all this to be true, that the use of that link in coupling the foreign car to the defendant's train and also in its use throughout the voyage from Chattanooga into Mississippi was due to the negligence of employees of the defendant who were charged by it with the duty of inspecting the link before and at the time of incorporating the foreign car into this train and at the several points in Alabama where inspectors were stationed as shown by the evidence, and also of the train-men charged with the duty of inspection as the train was en route. There is no pretense that the defendant had not been sufficiently careful in the selection of these inspectors or that they were incompetent. It is not pretended that they were insufficient in number or stationed at points too widely separated along the line. There is no such idea advanced as that the defendant was negligent in the purchasing of links of adequate strength, and supplying them to these inspectors and to trains gene­ rally; or that there was any necessity for the continued use of this link upon a discovery of its defective condition; but on the contrary it is affirmatively shown that the defend­ ant purchased and supplied its trains and employees with all necessary links of good quality and perfect condition to be used in its trains, to supply the places of links which be­ came defective from use, and to substitute for defective links coming to this road with foreign cars. The only negligence, in other words and in short, which finds support by direction or inference in any tendency of the evidence, is that of per­ sons whose duty it was to inspect the links of the train, and remove such as were defective and replace them with others which were not defective. This was the negligence not of the master, the defendant, but of fellow-servants of the plaintiff, for which at common-law the defendant is not liable. Thus it is said in McKinney on Fellow-Servants, § 127 : "It is a very common thing for train hands to receive injury through the negligence of persons employed by the company to inspect their cars to discover defects and repair them. The weight of authority, perhaps, is to the effect that the negligence of such employees in the performance of such duties cannot be attributed to the company, and it is consequently not liable for it." Citing among other cases Smith v. Potter, 46 Mich. 258; s. c. 2 Am. & Eng. R. R. Cas. 140; Mackin v. Railroad Co., 135 Mass. 201; s. c.

15 Am. & Eng. R. R. Cas. 196; Railroad Co. v. Webb, 12 Ohio St. 475; Railroad Co. v. Rice, 11 So. West Rep. (Ark.) 699; Kidwell v. Railroad Co. 3 Wood (U. S.) 313; and our own case

[130] of Smoot v. Mobile & Montgomery R. R. Co. 67 Ala. 13; and these and other cases are cited to the same proposition in 7 Am. & En. Encyc. of Law p. 864, note.

There are cases which hold to the contrary, but the law is and has long been settled in this State as we have stated it, the case of Smoot v. Mobile (t Montgomery R. R. Co. supra, being directly in point.—Mobile & Ohio R. R. Co. v. Thomas, 42 Ala. 672, 720 et seq; Mobile & Montgomery Ry. Co. v. Smith, 59 Ala. 245; Louisville & Nashville R. R. Co. v. A.llen, 78 Ala. 494.

This being the common-law applicable to the premises as understood and declared in Alabama, it will be presumed in our courts as thus declared to be the common-law of Mississippi, unless the evidence shows a different rule to have been announced by the Supreme Court of the State as being the common-law thereof. The evidence adduced here fails to show any such thing; but to the contrary it is made to appear from the testimony of Judge Arnold and by the decisions of the Supreme Court of Mississippi which were introduced on the trial below that that court is in full accord with this one in this respect. Indeed, if any thing, those decisions go further than this court has ever gone in applying the doctrine of fellow-servants to the exemption of railway companies from liability to one servant for injuries resulting from the negligence of another, holding in one case that a hostler whose only duty it was to supply an engine with sufficient sand before turning it over to the engineer to go on the road is a fellow-servant of the engineer for whose negligent failure to supply the same the company would not be liable.–L. & N. R. R. Co. v. Petty, 67 Miss. 255; in another, that a section foreman and a laborer working under him were fellow-servants in such sort that their common master would not be liable for the negligence of the former in attempting to repair a fishbar which he ought to have discarded and applied for a new one.—Lagrave v. Mobile & Ohio R. R. Co. 67 Miss. 532; and in yet another case, that a section foreman and train-man are fellow-servants in respect of the Ifegligence of the former unknown to the company in failing to keep the track in repair, and that an engineer on a passing train who was injured in consequence could not recover against common employer.–N. 0. J. & G. N. R. R. Co. v. Hughes, 49 Miss. 258; and the doctrine of this case is said by Mr. McKinney to be "substantially the rule recognized by the English common-law decisions." McKinney on Fellow-servants, p. 82 § 29. See also McMaster v. Illinois Central R. R. Co. 65 Miss. 264.

[131] Proceeding therefore on the presumptions we are authorized to indulge and also on the evidence adduced in this case as to the law of Mississippi in this connection, and upon the testimony most favorable to the plaintiff as to the cause of his injuries, we feel entirely safe in declaring that plaintiff has shown no cause of action under the common-law as it is understood and applied both here and in Mississippi.

It is, however, further contended that the plaintiff, if his evidence be believed, has made out a case for the recovery sought under the Employer's Liability Act of Alabama, it being clearly shown that there is no such, or similar law of force in the State of Mississippi. Considering this position in the abstract, that is dissociated from the facts of this particular case which are supposed to exert an important influence upon it, there can not be two opinions as to its being unsound and untenable. So looked at, we do not understand appellee's counsel even to deny either the proposition or its application to this case, that there can be no recovery in one State for injuries to the person sustained in another unless the infliction of the injuries is actionable under the law of the State in which they were received. Certainly this is the well established rule of law subject in some jurisdictions to the qualification that the infliction of the injuries would also support an action in the State where the suit is brought, had they been received within that State. 3 Am. & Eng. Encyc. of Law, p. 508-9; Hyde’s Admr. v. Wabash, St. Louis & Pacfic Ry. Co. 61 Iowa, 441; East Tenn. Va. & Gu. R. R. Co. v. Lewis., 14 S. W. Rep. 603; Buckles v. Ellers, 72 Incl. 220; Willis v. Mo. Pac. Ry. Co. 61 Texas, 432; Woodward v. M.S. & N. I R. R. Co. 10 Ohio St. 121; Whitford v. Panama Railroad Co. 23 N. Y. 465; Debovois v. .N. Y. L. E. & W. R. R. Co. 98 N. Y. 377; N C. & St. L. Ry. Co..v. Foster, 11 Amer. & Eng. R. R. Cas. 180; 2 Rover on Railroads, p. 1149 ; Kahl v. M & C. R. R. Co. 95 Ala. 337; C. St. L. & JJio. R. R. Co. v. Doyle, 60 Miss. 977; Davis 1'. N. Y. & N E. R. R. Co. 143 Mass. 301; LeForest v. Tolman, 117 Mass. 109; s. c. 19 Amer. Rep. 400; Lime­ killer v. H. & St. J. R. R. Co. 33 Kan. 83; The Scotland, 105 U. S. 24; The Santa Cruz, 1 C. Rob. 50; A. '1'. & S. F. R. R. Co. v. Moore, 11 Am. & Eng. R. R. Cas. 243.

But it is claimed that the facts of this ease take it out of the general rule which the authorities cited above abundantly support, and authorize the courts of Alabama to subject the defendant to the payment of damages under section 2590 of the Code, although the injuries counted on were sustained in Mississippi under circumstances which involved no liability on the defendant by the laws of that State.

[132] This insistence is in the first instance based on that aspect of the evidence which goes to show that the negligence which produced the casualty transpired in Alabama, and the theory that wherever the consequence of that negligence manifested itself, a recovery can be had in Alabama. We are referred to no authority in support of this proposition, and exhaustive investigation on our part has failed to disclose close any. There are at least two well considered cases against it, one of which involved an effort to recover for personal injuries sustained in Alabama under circumstances which afforded no cause of action in Alabama in the courts of Tennessee where the causal negligence occurred and where also had the negligence manifested itself in the results complained of there, the plaintiff would have been entitled to recover. The accident happened on a train going from Nashville to Chattanooga, in Tennessee, on a railway which runs for a comparatively short distance through Alabama. The negligence relied on consisted in the failure of employees of the defendant charged in that behalf to discover and remedy a defective brake before the train left Nashville as well as during its passage through Tennessee. While the train was running through Alabama, a brakeman was killed in consequence of the defect in this brake. All this is precisely on all fours with our case in those of its aspects most favorable to the plaintiff. That plaintiff, the court conceded, would have had a good cause o · action under the law of Tennessee, the place of the negligence, if his intestate had been injured within its limits. So here, the plaintiff on one aspect of the evidence would have had a good cause for ac ion in Alabama, the place of the negligence, had he been injured in Alabama. But it was found in that case that the law of Alabama gave no cause of action for the negligent failure to inspect the appliances used in operating a train, but held the brakeman and the inspectors to be fellow-servants in respect thereto, just as here the laws of Mississippi afforded no redress for the consequence of such negligence, though our statutes have since the Tennessee decision provided therefor; and it was held on the authority of Mobile & Ohio R. R. Co. v. Thomas, 42 Ala. 672, that there could have been no recovery in Alabama and that of consequence no cause of action existed in Tennessee, the court saying: '·There is no question but the laws of Alabama· · · controlled the rights of the parties in this case, and whether there was error in this part of the charge (referring to an instruction as to defendant's liability on the negligence shown) as given, or the refusal of the specific instructions asked for (substantial-[133]-ly that the negligence of a car inspector from which a brakeman suffers injury is no ground for action against their common employer,) depends wholly upon the laws of that State. Nashville, Chattanooga & St. Louis By. Co. v. Foster, 10 Lea, 352 ; s. o. 11 Amer. & Eng. E. E. Ca's. 180. In the other case the precise point here under consideration was brought before the Supreme Court of Mississippi, in an action instituted in that State sounding in damages for fatal injuries inflicted upon plaintiff's intestate in the State of Tennessee. It was insisted that inasmuch as the death of the deceased resulted from the negligent failure of a train dispatcher in Mississippi to give requisite orders to the trainmen at a certain point in Tennessee, the rights of the parties were de­ terminable by the laws of Mississippi the place of the disastrous negligent omission. But the court held to the contrary, saying: "The right of the appellee is determinable by the laws of Tennessee, in which State the killing of her husband occurred. The view that no recovery could be had here, except for a result traceable to an omission of duty in Mississippi is unfounded. Physical force proceeding from this State and inflicting injury in another State might give rise to an action in either State, and vice versa but the omission of duty in Mississippi cannot transfer a consequence of it manifested physically in another State to Mississippi. The cases of injuries commenced in one jurisdiction and completed in another illustrate our views on this subject. The true view is that the legal entity called the corporation is omni-present on its railroad, and the presence or absence of negligence with respect to an occurrence at any point of the line is not to be resolved by the place at which an officer or employe was stationed for duty. The question is as to duty operating effectually at the place where its alleged failure caused harm to result. The locality of the collision was in Tennessee. It was there, if any where, that the company was remiss in duty, for there is where its proper caution should have been used."–Chicago, St. Louis & New Orleans R. R. Co. v. Doyle, 60 Miss. 977, 984. If this doctrine was properly applied to the facts of that case where the act to be performed, the failure to perform which caused the in­ jury, could only be performed at a point in Mississippi and by an employe who was stationed and remained at that place, it would seem to address itself with more force to the case at bar where it appears the corporation was in fact present with the train and with the defective link every inch of the journey from Birmingham to the point of the accident in the person of the conductor and other trainmen who were charg-[134]-ed with the duty all along the line of discovering and removing the unsafe appliances.

The position of the Mississippi court appears to us to be eminently sound in principle and upon logic. It is admitted, or at least cannot be denied, that negligence of duty unproductive of damnifying results will not authorize or support a recovery. Up to the time train passed out of Alabama no injury had resulted. For all that occurred in Alabama, therefore, no cause of action whatever arose. The face which created the right to sue, the injury without which confessedly no action would lie anywhere, transpired in the State of Mississippi. It was in that State, therefore, necessarily that the cause of action, if any, arose; and whether a cause of action arose and existed at all or not must in all reason be determined by the law which obtained at the time and place when and where the fact which is relied on to justify a recovery transpired. Section 2590 of the Code of Alabama had no efficiency beyond the lines of Alabama. It cannot be allowed to operate upon facts occurring in another State so as to evolve out of them rights and liabilities which do not exist under the law of that State which is of course paramount in the premises. ·where the facts occur in Alabama and a liability becomes fixed in Alabama, it may be enforced in another State having like enactments, or whose policy is not opposed to the spirit of such enactments, but this is quite a different matter. This is hut enforcing the statute upon facts to which it is applicable all of which occur within the territory for the government of which it was enacted. Section 2590 of the Code, in other words is to be interpreted in the light of universally recognized principles of private international or interstate law, as if its operation had been expressly limited to this State and as if its first line read as follows: ''When a personal injury is received in Alabama by a servant or employee," &c., &c. The negligent infliction of an injury here under statutory circumstances creates a right of action here, which, being transitory, may be enforced in any other State or country the comity of which admits of it; but for an injury inflicted elsewhere than in Alabama our statute gives no right of recovery, and the aggrieved party must look to the local law to ascertain what his rights are. Under that law this plaintiff had no cause of action, as we have seen, and hence he has no rights which our courts can enforce, unless it be upon a consideration to be presently adverted to. We have not been inattentive to the suggestions of counsel in this connection, which are based upon that rule of the statutory and common crim-[135]-inal law under which a murderer is punishable where the fatal blow is delivered, regardless of the place where death ensues.—Green v. State, 66 Ala. 40. This principle is patently without application here. There would be some analogy if the plaintiff had been stricken in Alabama and suffered in Mississippi, which is not the fact. I here is, however, an analogy which is afforded by the criminal law, but which points away from the conclusion appellee's counsel desire us to reach. This is found in that well established doctrine of criminal law, that where the unlawful act is committed in one jurisdiction or State and takes effect-produces the result which it is the purpose of the law to prevent, or, it having ensued, punish for-in another jurisdiction or State, the crime is deemed to have been committed and is punished in that jurisdiction or State in which the result is manifested, and not where the act was committed. 1 Bish. Cr. Law, § 110 et seq.; 1 Bish. Cr. Pro. §53 et seq.

Another consideration-that referred to above-it is insisted, entitles this plaintiff to recover here under the Employer's Liability Act for an injury inflicted beyond the territorial operation of that act. This is claimed upon the fact that at the time :plaintiff was injured he was in the dis­ charge of duties which rested on him by the terms of a contract between him and defendant which had been entered into in Alabama, and, hence, was an Alabama contract, in connection with the facts that plaintiff was and is a citizen of this State, and the defendant is an Alabama corporation. These latter facts-of citizenship and domicile respectively of plaintiff and defendant–are of no importance in this connection, it seems to us, further than this: they may tend to show that the contract was made here, which is not controverted, and if the plaintiff has a cause of action at all, he, by reason of them, may prosecute it in our courts. They have no bearing on the primary question of existence of a cause of action, and as that is the question before us, we need not further advert to the fact of plaintiff's citizenship or defendant's domicile.

The contract was that plaintiff should serve the defendant in the capacity of a brakeman on its freight train between Birmingham, Alabama, and Meridian, Mississippi, and should receive as compensation a stipulated sum for each trip from Birmingham to Meridian and return. The theory is that the Employer's Liability Act became a part of this contract; that the duties and liabilities which It prescribes became contractual duties and liabilities, or duties and liabilities springing out of the contract, and that these duties [136] attended upon the execution whenever its performance was required—in Mississippi as well as in Alabama—and that the liability prescribed for a failure to perform any of such duties attached upon such failure and consequent injury wherever it occurred, and was enforceable here because imposed by an Alabama contract notwithstanding the remission of duty and the resulting injury occurred in Mississippi, under whose laws no liability was incurred by such remission. The argument is that a contract for service is a condition precedent to the application of the statute, and that "as soon as the contract is made the rights and obligations of the parties, under the Employer's Act, became vested and fixed," so that "no subsequent repeal of the law could deprive the injured party of his rights nor discharge the master from his liabilities," &c., &c. I£ this argument is sound, and it is sound if the duties and liabilities pre­ scribed by the act can be said to be contractual duties and obligations at all, it would lead to conclusions the possibility of which has not hitherto been suggested by any court or law writer, and which, to say the least, would be astounding to the profession. For instance: If the act of 1885 becomes a part of every contract of service entered into since its passage, just "as if such law were in so many words expressly included in the contract as a part thereof," as counsel insist it did, so as to make the liability of the master to pay damages from injuries to a fellow-servant of his negligent employe, a contractual obligation, no reason can be conceived why the law existing in this regard prior to the pas­ sage of that act did not become in like manner a part of every contract of service then entered into, so that every such contract would be deemed to contain stipulations for the non-liability of the master for injuries flowing from the negligence of a fellow-servant, and confining the injured servant's right to damage to a claim against his negligent fellow-servant-the former, in other words, agreeing to look alone to the latter. There were many thousands of such contracts existing in this country and England at the time when statutes similar to section 2590 of our Code were enacted, there were indeed many thousands of such contracts existing in Alabama when that section became the law of this State. Each of these contracts, if the position of plaintiff as to our statute being embodied into the terms of his contract so that its duties were contractual duties, and its liabilities contractual obligations to pay money can be maintained, involved the assurances of organic provisions, State and Federal, of the continued non-liability of the master for the [137] negligence of his servants, notwithstanding the passage of such statutes. Yet these statutes were passed, and they have been applied to servants under pre-existing contracts as fully as to servants under subsequent contracts, and there has never been a suggestion even in any part of the commonlaw world that they were not rightly so applied. If plaintiff's contention is well taken, many a judgment has gone on the rolls in this State, and throughout the country, and has been satisfied, which palpably overrode vested rights without the least suspicion on the part of court or counsel that one of the most familiar ordinances of the fundamental law was being violated. Nay more, another result not heretofore at all contemplated would ensue. Contracts for serving partly in Alabama might be now entered into in adjoining States where the common-law rule still obtains, as in Mississippi, for instance, where the servant has no right to recover for the negligence of his fellow, and the assumption of this risk under the law becoming, according to the argument of counsel, a contractual obligation to bear it, such contracts would be good in Alabama and as to servants entering into them, our statute would have no operation even upon negligence and resulting injury within its terms occurring wholly in Alabama. And on the other hand, if this defendant is under a contractual obligation to pay the plaintiff the dam­ ages sustained by him because of the injury inflicted in Mississippi, the contract could be of course enforced in Mississippi and damages there awarded by its courts, not­ withstanding the law of that State provides that there can be no recovery under any circumstances whatever by one servant for the negligence of his fellow employe. We do not suppose that such a proposition ever has been or ever will be made in the courts of Mississippi. Yet that it should be made and sustained is the. natural and necessary sequence of the position advanced in this case. These considerations demonstrate the infirmity of plaintiff's position in this connection, and serve to show the necessity and propriety of the conclusion we propose to announce on this part of the case. That conclusion is, that the duties and liabilities incident to the relation between the plaintiff and the defendant which are involved in this case, are not imposed by and do not rest in or spring from the contract between the parties. The only office of the contract, under section 2590 of the Code, is the establishment of a relation between them, that of master and servant; and it is upon that relation, that incident or consequence of the contract, and not upon the rights of the parties under the contract, that our statute operates. The law is not con-[138]-cerned with the contractual stipulations, except in so far as to determine from them that the relation upon which it is to operate exists. Finding this relation the statute imposes certain duties and liabilities on the parties to it wholly regardless of the stipulations of the contract as to the rights of the parties under it, and, it may be, in the teeth of. such stipulations. It is the purpose of the statute and must bethe limit of its operation to govern persons standing in the relation of master and servants to each other in respect of their conduct in certain particulars within the State of Alabama. Mississippi has the same right to establish govern­ mental rules for such persons within her borders as Alabama; and she has established rules which are different from those of our law. And the conduct of such persons toward each other is, when its legality is brought in question, to he adjudged by the rules of the one or the other States as it falls territorially within the one or the other. The doctrine is like that which prevails in respect of other relations, as that of man and wife. Marriage is a contract. The entering into this contract raises up certain duties and imposes certain liabilities in all civilized countries. What these duties and liabilities are at the place of the contract are determinable by the law of that place ; but when the parties go into other jurisdictions, the relation created by the contract under the laws of the place of its execution will he recognized, but the personal duties, obligations and liabilities incident to the relation are such as exist under the law of the jurisdiction in which an act is done or omitted as to the legality, effect or consequence of which the question arises. It might as well he said where there is a marriage in Alabama and the parties remove to Mississippi, and the wife there makes a contract which is void in Mississippi but valid under our statute, and subsequently they return to Alabama, that our courts will enforce that contract, or if such husband while in Mississippi does an act which is innocuous and lawful in that State, but which if done here would entail liability upon him, and the parties afterwards return here, that the liability imposed by our laws could be enforced here, because the parties entered into the contract here, as that a master is liable here for conduct towards his servant which was proper, or at least involved no liability, where it took place, simply because the contract which created the relation was entered into in this State. The whole argument is at fault. The only true doctrine is that each sovereignty, state or nation, has the exclusive power to finally determine and declare what acts or [139] omission in the conduct of one to another, whether they be strangers or sustain relations to each other which the law recognizes, as parent and child, husband and wife, master and servant, and the like, shall impose a liability in damages for the consequent injury, and the courts of no other sovereignty can impute a damnifying quality to an act or omission which afforded no cause of action where it transpired. These propositions find illustration and support in the case of Whitford v. The Panama R. R. Co., 23 N.Y. 465, where the relation involved was that of carrier and passenger, a relation which had been created by a contract made in New York, between a corporation and a citizen thereof for carriage, commencing in that State and ending in San Francisco, via Panama and over the Panama railroad. The passenger was killed through the fault of the corporation's servants while being transported along this railroad. The law of New York gave to the personal representative of a person whose death was caused by the wrongful act or omission of another, a right of action therefor in all cases where the deceased, had the injury fallen short of death, could have recovered. It did not appear that the laws of New Granada where the injury was inflicted, authorized any recovery on the facts alleged and proved. It was urged, as here, that the domicile of the parties and the fact that they contracted in New York took the case out of general rules as to territorial limitations upon the operation of statutes, but the plaintiff was non-suited, it being held in effect that the laws of New Granada where controlling as to the duties and liabilities incident to the relation which existed between them, while the contract of carriage was being performed in that country, and that the carrier so far as care and diligence were concerned owed the passenger no duties there except such as were imposed upon the relation by the local law, and that no liability for negligence and its results not prescribed by that law rested on the company. And the court, inter alia, said: ·'Suppose the government of New Granada to have enacted that the proprietors of a railroad company should not be responsible for the negligence of its servants, provided there was no want of due care in selecting them; it could not be pretended that its will could be set at naught by prosecuting the corporation in the courts of another State where the law was different. . . . The true theory is, that no suit whatever respecting this injury could be sustained in the courts of this State, except pursuant to the law of international comity. By that law foreign contracts and foreign transactions, out of which liabilities have arisen, [140] may be prosecuted in our tribunals by the implied assent of the government of this State ; but in all such cases, we administer the foreign law as from the proofs we find it to be, or as without proofs, we presume it to be." So, in the case of Gray v. Jackson & Co., 51 N. H., 9, there was a contract of affreightment by the terms of which goods were to be carried out of one State into and through other States. They were lost in a State other than that in which the con­ tract was made and the carriage commenced. By the law of the place of the contract the carrier was liable for the loss under the circumstances shown in evidence had it occurred in that State. By the law of the State where the loss occurred, however, the carrier was not liable. In an action for the loss prosecuted in the State of the contract, the law, not of that State, but of the place of the loss which operated as to the particular transaction on the relation of shipper and carrier and prescribed the duties and liabilities incident to that relation in that State, regardless of the place where the contract creating the relation was entered into, was applied and made to determine the rights of the parties to be other than they were under the law of the place of the contract which was also, as here, the place of the forum.

The foregoing views will suffice to indicate the grounds of our opinion that the rights of this plaintiff are determinable solely by the law of the State of Mississippi, and of our conclusion that upon no aspect or tendency of the evidence as to the circumstances under which the injury was sustained and as to the laws of Mississippi obtaining in the premises was the plaintiff entitled to recover.

The general affirmative charge requested for defendant should have been given. The other very numerous assignments of error need not be considered.

For the error in refusing to instruct the jury to find for the defendant if they believed the evidence, the judgment is reversed and the cause will be remanded.

CERTIORARI TO THE SUPREME COURT OF MINNESOTA.

[304] Mark M. Nolan argued the cause and filed a brief for petitioner.

Andreas F. Lowenfeld argued the cause for respondent. With him on the brief were Samuel H. Hertogs and Bruce J. Douglas.

JUSTICE BRENNAN announced the judgment of the Court and delivered an opinion, in which JUSTICE WHITE, JUSTICE MARSHALL, and JUSTICE BLACKMUN joined.

This Court granted certiorari to determine whether the Due Process Clause of the Fourteenth Amendment^[1] or the Full Faith and Credit Clause of Art. IV, § 1,^[2] of the United States Constitution bars the Minnesota Supreme Court's choice of substantive Minnesota law to govern the effect of a provision in an insurance policy issued to respondent's decedent. 444 U. S. 1070 (1980).

[305]

I

Respondent's late husband, Ralph Hague, died of injuries suffered when a motorcycle on which he was a passenger was struck from behind by an automobile. The accident occurred in Pierce County, Wis., which is immediately across the Minnesota border from Red Wing, Minn. The operators of both vehicles were Wisconsin residents, as was the decedent, who, at the time of the accident, resided with respondent in Hager City, Wis., which is one and one-half miles from Red Wing. Mr. Hague had been employed in Red Wing for the 15 years immediately preceding his death and had commuted daily from Wisconsin to his place of employment.

Neither the operator of the motorcycle nor the operator of the automobile carried valid insurance. However, the decedent held a policy issued by petitioner Allstate Insurance Co. covering three automobiles owned by him and containing an uninsured motorist clause insuring him against loss incurred from accidents with uninsured motorists. The uninsured motorist coverage was limited to $15,000 for each automobile.^[3]

After the accident, but prior to the initiation of this lawsuit, respondent moved to Red Wing. Subsequently, she married a Minnesota resident and established residence with her new husband in Savage, Minn. At approximately the same time, a Minnesota Registrar of Probate appointed respondent personal representative of her deceased husband's estate. Following her appointment, she brought this action in Minnesota District Court seeking a declaration under Minnesota law that the $15,000 uninsured motorist coverage on each of her late husband's three automobiles could be "stacked" to provide total coverage of $45,000. Petitioner defended on the ground that whether the three uninsured motorist [306] coverages could be stacked should be determined by Wisconsin law, since the insurance policy was delivered in Wisconsin, the accident occurred in Wisconsin, and all persons involved were Wisconsin residents at the time of the accident.

The Minnesota District Court disagreed. Interpreting Wisconsin law to disallow stacking, the court concluded that Minnesota's choice-of-law rules required the application of Minnesota law permitting stacking. The court refused to apply Wisconsin law as "inimical to the public policy of Minnesota" and granted summary judgment for respondent.^[4]

The Minnesota Supreme Court, sitting en banc, affirmed the District Court.^[5] The court, also interpreting Wisconsin law to prohibit stacking,^[6] applied Minnesota law after analyzing the relevant Minnesota contacts and interests within the analytical framework developed by Professor Leflar.^[7] See Leflar, Choice-Influencing Considerations in Conflicts Law, 41 N. Y. U. L. Rev. 267 (1966). The state court, therefore, examined the conflict-of-laws issue in terms of (1) predictability of result, (2) maintenance of interstate order, (3) simplification of the judicial task, (4) advancement of the forum's governmental interests, and (5) application of the better rule of law. Although stating that the Minnesota contacts might not be, "in themselves, sufficient to mandate application of [Minnesota] law,"^[8] 289 N. W. 2d 43, 49 [307] (1978), under the first four factors, the court concluded that the fifth factor—application of the better rule of law—favored selection of Minnesota law. The court emphasized that a majority of States allow stacking and that legal decisions allowing stacking "are fairly recent and well considered in light of current uses of automobiles." Ibid. In addition, the court found the Minnesota rule superior to Wisconsin's "because it requires the cost of accidents with uninsured motorists to be spread more broadly through insurance premiums than does the Wisconsin rule." Ibid. Finally, after rehearing en banc,^[9] the court buttressed its initial opinion by indicating "that contracts of insurance on motor vehicles are in a class by themselves" since an insurance company "knows the automobile is a movable item which will be driven from state to state." 289 N. W. 2d, at 50 (1979). From this premise the court concluded that application of Minnesota law was "not so arbitrary and unreasonable as to violate due process." Ibid.

II

It is not for this Court to say whether the choice-of-law analysis suggested by Professor Leflar is to be preferred or whether we would make the same choice-of-law decision if sitting as the Minnesota Supreme Court. Our sole function is to determine whether the Minnesota Supreme Court's choice of its own substantive law in this case exceeded federal constitutional limitations. Implicit in this inquiry is the recognition, long accepted by this Court, that a set of facts giving rise to a lawsuit, or a particular issue within a lawsuit, may justify, in constitutional terms, application of the law of more than one jurisdiction. See, e. g., Watson v. Employers Liability Assurance Corp., 348 U. S. 66, 72-73 (1954); n. 11, infra. See generally Clay v. Sun Insurance Office, Ltd., 377 U. S. [308] 179, 181-182 (1964) (hereinafter cited as Clay II). As a result, the forum State may have to select one law from among the laws of several jurisdictions having some contact with the controversy.

In deciding constitutional choice-of-law questions, whether under the Due Process Clause or the Full Faith and Credit Clause,^[10] this Court has traditionally examined the contacts of the State, whose law was applied, with the parties and with the occurrence or transaction giving rise to the litigation. See Clay II, supra, at 183. In order to ensure that the choice of law is neither arbitrary nor fundamentally unfair, see Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532, 542 (1935), the Court has invalidated the choice of law of a State which has had no significant contact or significant aggregation of contacts, creating state interests, with the parties and the occurrence or transaction.^[11]

[309] Two instructive examples of such invalidation are Home Ins. Co. v. Dick, 281 U. S. 397 (1930), and John Hancock Mutual Life Ins. Co. v. Yates, 299 U. S. 178 (1936). In both cases, the selection of forum law rested exclusively on the presence of one nonsignificant forum contact.

Home Ins. Co. v. Dick involved interpretation of an insurance policy which had been issued in Mexico, by a Mexican insurer, to a Mexican citizen, covering a Mexican risk. The policy was subsequently assigned to Mr. Dick, who was domiciled in Mexico and "physically present and acting in Mexico," 281 U. S., at 408, although he remained a nominal, permanent resident of Texas. The policy restricted coverage to losses occurring in certain Mexican waters and, indeed, the loss occurred in those waters. Dick brought suit [310] in Texas against a New York reinsurer. Neither the Mexican insurer nor the New York reinsurer had any connection to Texas.^[12] The Court held that application of Texas law to void the insurance contract's limitation-of-actions clause violated due process.^[13]

The relationship of the forum State to the parties and the transaction was similarly attenuated in John Hancock Mutual Life Ins. Co. v. Yates. There, the insurer, a Massachusetts corporation, issued a contract of insurance on the life of a New York resident. The contract was applied for, issued, and delivered in New York where the insured and his spouse resided. After the insured died in New York, his spouse moved to Georgia and brought suit on the policy in Georgia. Under Georgia law, the jury was permitted to take into account oral modifications when deciding whether an insurance policy application contained material misrepresentations. Under New York law, however, such misrepresentations were to be evaluated solely on the basis of the written application. The Georgia court applied Georgia law. This Court reversed, finding application of Georgia law to be unconstitutional.

Dick and Yates stand for the proposition that if a State has only an insignificant contact with the parties and the [311] occurrence or transaction, application of its law is unconstitutional.^[14] Dick concluded that nominal residence—standing alone—was inadequate; Yates held that a postoccurrence change of residence to the forum State—standing alone—was insufficient to justify application of forum law. Although instructive as extreme examples of selection of forum law, neither Dick nor Yates governs this case. For in contrast to those decisions, here the Minnesota contacts with the parties and the occurrence are obviously significant. Thus, this case is like Alaska Packers, Cardillo v. Liberty Mutual Ins. Co., 330 U. S. 469 (1947), and Clay II—cases where this Court sustained choice-of-law decisions based on the contacts of the State, whose law was applied, with the parties and occurrence.

In Alaska Packers, the Court upheld California's application of its Workmen's Compensation Act, where the most significant contact of the worker with California was his execution of an employment contract in California. The worker, a nonresident alien from Mexico, was hired in California for seasonal work in a salmon canning factory in Alaska. As part of the employment contract, the employer, who was doing business in California, agreed to transport the worker to Alaska and to return him to California when the work was completed. Even though the employee contracted to be bound by the Alaska Workmen's Compensation Law and was injured in Alaska, he sought an award under the California Workmen's Compensation Act. The Court held that the choice of California law was not "so arbitrary or unreasonable as to amount to a denial of due process," 294 U. S., at 542, because "[w]ithout a remedy in California, [he] would be remediless," ibid., and because of California's interest that the worker not become a public charge, ibid.^[15]

[312] In Cardillo v. Liberty Mutual Ins. Co., supra, a District of Columbia resident, employed by a District of Columbia employer and assigned by the employer for the three years prior to his death to work in Virginia, was killed in an automobile crash in Virginia in the course of his daily commute home from work. The Court found the District's contacts with the parties and the occurrence sufficient to satisfy constitutional requirements, based on the employee's residence in the District, his commute between home and the Virginia workplace, and his status as an employee of a company "engaged in electrical construction work in the District of Columbia and surrounding areas." Id., at 471.^[16]

Similarly, Clay II upheld the constitutionality of the application of forum law. There, a policy of insurance had issued in Illinois to an Illinois resident. Subsequently the insured moved to Florida and suffered a property loss in Florida. Relying explicitly on the nationwide coverage of the policy and the presence of the insurance company in Florida and implicitly on the plaintiff's Florida residence and the occurrence of the property loss in Florida, the Court sustained the Florida court's choice of Florida law.

The lesson from Dick and Yates, which found insufficient forum contacts to apply forum law, and from Alaska Packers, Cardillo, and Clay II, which found adequate contacts to sustain the choice of forum law,^[17] is that for a State's substantive [313] 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. Application of this principle to the facts of this case persuades us that the Minnesota Supreme Court's choice of its own law did not offend the Federal Constitution.

III

Minnesota has three contacts with the parties and the occurrence giving rise to the litigation. In the aggregate, these contacts permit selection by the Minnesota Supreme Court of Minnesota law allowing the stacking of Mr. Hague's uninsured motorist coverages.

First, and for our purposes a very important contact, Mr. Hague was a member of Minnesota's work force, having been employed by a Red Wing, Minn., enterprise for the 15 [314] years preceding his death. While employment status may implicate a state interest less substantial than does resident status, that interest is nevertheless important. The State of employment has police power responsibilities towards the nonresident employee that are analogous, if somewhat less profound, than towards residents. Thus, such employees use state services and amenities and may call upon state facilities in appropriate circumstances.

In addition, Mr. Hague commuted to work in Minnesota, a contact which was important in Cardillo v. Liberty Mutual Ins. Co., 330 U. S., at 475-476 (daily commute between residence in District of Columbia and workplace in Virginia), and was presumably covered by his uninsured motorist coverage during the commute.^[18] The State's interest in its commuting nonresident employees reflects a state concern for the safety and well-being of its work force and the concomitant effect on Minnesota employers.

That Mr. Hague was not killed while commuting to work or while in Minnesota does not dictate a different result. To hold that the Minnesota Supreme Court's choice of Minnesota law violated the Constitution for that reason would require too narrow a view of Minnesota's relationship with the parties and the occurrence giving rise to the litigation. An automobile accident need not occur within a particular jurisdiction for that jurisdiction to be connected to the occurrence.^[19] [315] Similarly, the occurrence of a crash fatal to a Minnesota employee in another State is a Minnesota contact.^[20] If Mr. Hague had only been injured and missed work for a few weeks, the effect on the Minnesota employer would have been palpable and Minnesota's interest in having its employee made whole would be evident. Mr. Hague's death affects Minnesota's interest still more acutely, even though Mr. Hague will not return to the Minnesota work force. Minnesota's work force is surely affected by the level of protection the State extends to it, either directly or indirectly. Vindication of the rights of the estate of a Minnesota employee, therefore, is an important state concern.

Mr. Hague's residence in Wisconsin does not—as Allstate seems to argue—constitutionally mandate application of Wisconsin law to the exclusion of forum law.^[21] If, in the instant [316] case, the accident had occurred in Minnesota between Mr. Hague and an uninsured Minnesota motorist, if the insurance contract had been executed in Minnesota covering a Minnesota registered company automobile which Mr. Hague was permitted to drive, and if a Wisconsin court sought to apply Wisconsin law, certainly Mr. Hague's residence in Wisconsin, his commute between Wisconsin and Minnesota, and the insurer's presence in Wisconsin should be adequate to apply Wisconsin's law.^[22] See generally Cardillo v. Liberty [317] Mutual Ins. Co., supra; Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532 (1935); Home Ins. Co. v. Dick, 281 U. S., at 408, n. 5. Employment status is not a sufficiently less important status than residence, see generally Carroll v. Lanza, 349 U. S. 408 (1955); Alaska Packers Assn. v. Industrial Accident Comm'n, supra, when combined with Mr. Hague's daily commute across state lines and the other Minnesota contacts present, to prohibit the choice-of-law result in this case on constitutional grounds.

Second, Allstate was at all times present and doing business in Minnesota.^[23] By virtue of its presence, Allstate can hardly claim unfamiliarity with the laws of the host jurisdiction and surprise that the state courts might apply forum law to litigation [318] in which the company is involved. "Particularly since the company was licensed to do business in [the forum], it must have known it might be sued there, and that [the forum] courts would feel bound by [forum] law."^[24] Clay v. Sun Insurance Office Ltd., 363 U. S. 207, 221 (1960) (Black, J., dissenting).^[25] Moreover, Allstate's presence in Minnesota gave Minnesota an interest in regulating the company's insurance obligations insofar as they affected both a Minnesota resident and court-appointed representative—respondent—and a longstanding member of Minnesota's work force— Mr. Hague. See Hoopeston Canning Co. v. Cullen, 318 U. S. 313, 316 (1943).

Third, respondent became a Minnesota resident prior to institution of this litigation. The stipulated facts reveal that she first settled in Red Wing, Minn., the town in which [319] her late husband had worked.^[26] She subsequently moved to Savage, Minn., after marrying a Minnesota resident who operated an automobile service station in Bloomington, Minn. Her move to Savage occurred "almost concurrently," 289 N. W. 2d, at 45, with the initiation of the instant case.^[27] There is no suggestion that Mrs. Hague moved to Minnesota in anticipation of this litigation or for the purpose of finding a legal climate especially hospitable to her claim.^[28] The stipulated facts, sparse as they are, negate any such inference.

While John Hancock Mutual Life Ins. Co. v. Yates, 299 U. S. 178 (1936), held that a postoccurrence change of residence to the forum State was insufficient in and of itself to confer power on the forum State to choose its law, that case did not hold that such a change of residence was irrelevant. Here, of course, respondent's bona fide residence in Minnesota was not the sole contact Minnesota had with this litigation. And in connection with her residence in Minnesota, respondent was appointed personal representative of Mr. Hague's estate by the Registrar of Probate for the County of Goodhue, Minn. Respondent's residence and subsequent appointment in Minnesota as personal representative of her late husband's estate constitute a Minnesota contact which gives Minnesota an interest in respondent's recovery, an interest which the court below identified as full compensation for "resident accident victims" to keep them "off welfare rolls" and able "to meet financial obligations." 289 N. W. 2d, at 49.

[320] In sum, Minnesota had a significant aggregation^[29] of contacts with the parties and the occurrence, creating state interests, such that application of its law was neither arbitrary nor fundamentally unfair. Accordingly, the choice of Minnesota law by the Minnesota Supreme Court did not violate the Due Process Clause or the Full Faith and Credit Clause.

Affirmed.

JUSTICE STEWART took no part in the consideration or decision of this case.

JUSTICE STEVENS, concurring in the judgment.

As I view this unusual case—in which neither precedent nor constitutional language provides sure guidance—two separate questions must be answered. First, does the Full Faith and Credit Clause^[30] require Minnesota, the forum State, to apply Wisconsin law? Second, does the Due Process Clause^[31] of the Fourteenth Amendment prevent Minnesota from applying its own law? The first inquiry implicates the federal interest in ensuring that Minnesota respect the sovereignty of the State of Wisconsin; the second implicates the litigants' interest in a fair adjudication of their rights.^[32]

[321] I realize that both this Court's analysis of choice-of-law questions^[33] and scholarly criticism of those decisions^[34] have treated these two inquiries as though they were indistinguishable.^[35] [322] Nevertheless, I am persuaded that the two constitutional provisions protect different interests and that proper analysis requires separate consideration of each.

I

The Full Faith and Credit Clause is one of several provisions in the Federal Constitution designed to transform the several States from independent sovereignties into a single, unified Nation. See Thomas v. Washington Gas Light Co., 448 U. S. 261, 271-272 (1980) (plurality opinion); Milwaukee County v. M. E. White Co., 296 U. S. 268, 276-277 (1935).^[36] The Full Faith and Credit Clause implements this design by directing that a State, when acting as the forum for litigation having multistate aspects or implications, respect the legitimate interests of other States and avoid infringement upon their sovereignty. The Clause does not, however, rigidly [323] require the forum State to apply foreign law whenever another State has a valid interest in the litigation. See Nevada v. Hall, 440 U. S. 410, 424 (1979); Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532, 546-548 (1935); Pacific Employers Ins. Co. v. Industrial Accident Comm'n, 306 U. S. 493, 501-502 (1939).^[37] On the contrary, in view of the fact that the forum State is also a sovereign in its own right, in appropriate cases it may attach paramount importance to its own legitimate interests.^[38] Accordingly, the fact that a choice-of-law decision may be unsound as a matter of conflicts law does not necessarily implicate the federal concerns embodied in the Full Faith and Credit Clause. Rather, in my opinion, the Clause should not invalidate a state court's choice of forum law unless that choice threatens the federal interest in national unity by unjustifiably infringing upon the legitimate interests of another State.^[39]

[324] In this case, I think the Minnesota courts' decision to apply Minnesota law was plainly unsound as a matter of normal conflicts law. Both the execution of the insurance contract and the accident giving rise to the litigation took place in Wisconsin. Moreover, when both of those events occurred, the plaintiff, the decedent, and the operators of both vehicles were all residents of Wisconsin. Nevertheless, I do not believe that any threat to national unity or Wisconsin's sovereignty ensues from allowing the substantive question presented by this case to be determined by the law of another State.

The question on the merits is one of interpreting the meaning of the insurance contract. Neither the contract itself, nor anything else in the record, reflects any express understanding of the parties with respect to what law would be applied or with respect to whether the separate uninsured motorist coverage for each of the decedent's three cars could be "stacked." Since the policy provided coverage for accidents that might occur in other States, it was obvious to the parties at the time of contracting that it might give rise to the application of the law of States other than Wisconsin. Therefore, while Wisconsin may have an interest in ensuring that contracts formed in Wisconsin in reliance upon Wisconsin law are interpreted in accordance with that law, that interest is not implicated in this case.^[40]

[325] Petitioner has failed to establish that Minnesota's refusal to apply Wisconsin law poses any direct^[41] or indirect threat to Wisconsin's sovereignty.^[42] In the absence of any such [326] threat, I find it unnecessary to evaluate the forum State's interest in the litigation in order to reach the conclusion that the Full Faith and Credit Clause does not require the Minnesota courts to apply Wisconsin law to the question of contract interpretation presented in this case.

II

It may be assumed that a choice-of-law decision would violate the Due Process Clause if it were totally arbitrary or if it were fundamentally unfair to either litigant. 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.^[43] The forum State's interest in the 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.

The forum State's interest in the efficient operation of its judicial system is clearly not sufficient, however, to justify the application of a rule of law that is fundamentally unfair to one of the litigants. Arguably, a litigant could demonstrate such unfairness in a variety of ways. Concern about the fairness of the forum's choice of its own rule might arise [327] if that rule favored residents over nonresident, if it represented a dramatic departure from the rule that obtains in most American jurisdictions, or if the rule itself was unfair on its face or as applied.^[44]

The application of an otherwise acceptable rule of law may result in unfairness to the litigants if, in engaging in the activity which is the subject of the litigation, they could not reasonably have anticipated that their actions would later be judged by this rule of law. A choice-of-law decision that frustrates the justifiable expectations of the parties can be fundamentally unfair. This desire to prevent unfair surprise to a litigant has been the central concern in this Court's review of choice-of-law decisions under the Due Process Clause.^[45]

Neither the "stacking" rule itself, nor Minnesota's application of that rule to these litigants, raises any serious question of fairness. As the plurality observes, "[s]tacking was [328] the rule in most States at the time the policy was issued." Ante, at 316, n. 22.^[46] Moreover, the rule is consistent with the economics of a contractual relationship in which the policyholder paid three separate premiums for insurance coverage for three automobiles, including a separate premium for each uninsured motorist coverage.^[47] Nor am I persuaded that the decision of the Minnesota courts to apply the "stacking" rule in this case can be said to violate due process because that decision frustrates the reasonable expectations of the contracting parties.

Contracting parties can, of course, make their expectations explicit by providing in their contract either that the law of a particular jurisdiction shall govern questions of contract interpretation,^[48] or that a particular substantive rule, for instance "stacking," shall or shall not apply.^[49] In the absence [329] of such express provisions, the contract nonetheless may implicitly reveal the expectations of the parties. For example, if a liability insurance policy issued by a resident of a particular State provides coverage only with respect to accidents within that State, it is reasonable to infer that the contracting parties expected that their obligations under the policy would be governed by that State's law.^[50]

In this case, no express indication of the parties' expectations is available. The insurance policy provided coverage for accidents throughout the United States; thus, at the time of contracting, the parties certainly could have anticipated that the law of States other than Wisconsin would govern particular claims arising under the policy.^[51] By virtue of doing business [330] in Minnesota, Allstate was aware that it could be sued in the Minnesota courts; Allstate also presumably was aware that Minnesota law, as well as the law of most States, permitted "stacking." Nothing in the record requires that a different inference be drawn. Therefore, the decision of the Minnesota courts to apply the law of the forum in this case does not frustrate the reasonable expectations of the contracting parties, and I can find no fundamental unfairness in that decision requiring the attention of this Court.^[52]

[331] In terms of fundamental fairness, it seems to me that two factors relied upon by the plurality—the plaintiff's post-accident move to Minnesota and the decedent's Minnesota employment—are either irrelevant to or possibly even tend to undermine the plurality's conclusion. When the expectations of the parties at the time of contracting are the central due process concern, as they are in this case, an unanticipated postaccident occurrence is clearly irrelevant for due process purposes. The fact that the plaintiff became a resident of the forum State after the accident surely cannot justify a ruling in her favor that would not be made if the plaintiff were a nonresident. Similarly, while the fact that the decedent regularly drove into Minnesota might be relevant to the expectations of the contracting parties,^[53] the fact that he did so because he was employed in Minnesota adds nothing to the due process analysis. The choice-of-law decision of the Minnesota courts is consistent with due process because it does not result in unfairness to either litigant, not because Minnesota now has an interest in the plaintiff as resident or formerly had an interest in the decedent as employee.

III

Although I regard the Minnesota courts' decision to apply forum law as unsound as a matter of conflicts law, and there [332] is little in this record other than the presumption in favor of the forum's own law to support that decision, I concur in the plurality's judgment. It is not this Court's function to establish and impose upon state courts a federal choice-of-law rule, nor is it our function to ensure that state courts correctly apply whatever choice-of-law rules they have themselves adopted.^[54] Our authority may be exercised in the choice-of-law area only to prevent a violation of the Full Faith and Credit or the Due Process Clause. For the reasons stated above, I find no such violation in this case.

JUSTICE POWELL, with whom THE CHIEF JUSTICE and JUSTICE REHNQUIST join, dissenting.

My disagreement with the plurality is narrow. I accept with few reservations Part II of the plurality opinion, which sets forth the basic principles that guide us in reviewing state choice-of-law decisions under the Constitution. The Court should invalidate a forum State's decision to apply its own law only when there are no significant contacts between the State and the litigation. This modest check on state power is mandated by the Due Process Clause of the Fourteenth Amendment and the Full Faith and Credit Clause of Art. IV, § 1. I do not believe, however, that the plurality adequately analyzes the policies such review must serve. In consequence, it has found significant what appear to me to be trivial contacts between the forum State and the litigation.

[333]

I

At least since Carroll v. Lanza, 349 U. S. 408 (1955), the Court has recognized that both the Due Process and the Full Faith and Credit Clauses are satisfied if the forum has such significant contacts with the litigation that it has a legitimate state interest in applying its own law. The significance of asserted contacts must be evaluated in light of the constitutional policies that oversight by this Court should serve. Two enduring policies emerge from our cases.

First, the contacts between the forum State and the litigation should not be so "slight and casual" that it would be fundamentally unfair to a litigant for the forum to apply its own State's law. Clay v. Sun Ins. Office, Ltd., 377 U. S. 179. 182 (1964). The touchstone here is the reasonable expectation of the parties. See Weintraub, Due Process and Full Faith and Credit Limitations on a State's Choice of Law, 44 Iowa L. Rev. 449, 445-457 (1959) (Weintraub). Thus, in Clay, the insurer sold a policy to Clay "`with knowledge that he could take his property anywhere in the world he saw fit without losing the protection of his insurance.'" 377 U. S., at 182. quoting Clay v. Sun Ins. Office Ltd., 363 U. S. 207, 221 (1960) (Black, J., dissenting). When the insured moved to Florida with the knowledge of the insurer, and a loss occurred in that State, this Court found no unfairness in Florida's applying its own rule of decision to permit recovery on the policy. The insurer "must have known it might be sued there." Ibid. See also Watson v. Employers Liability Assurance Corp., 348 U. S. 66 (1954).^[55]

[334] Second, the forum State must have a legitimate interest in the outcome of the litigation before it. Pacific Ins. Co. v. Industrial Accident Comm'n, 306 U. S. 493 (1939). The Full Faith and Credit Clause addresses the accommodation of sovereign power among the various States. Under limited circumstances, it requires one State to give effect to the statutory law of another State. Nevada v. Hall, 440 U. S. 410, 423 (1979). To be sure, a forum State need not give effect to another State's law if that law is in "violation of its own legitimate public policy." Id., at 422. Nonetheless, for a forum State to further its legitimate public policy by applying its own law to a controversy, there must be some connection between the facts giving rise to the litigation and the scope of the State's lawmaking jurisdiction.

Both the Due Process and Full Faith and Credit Clauses ensure that the States do not "reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system." World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286, 292 (1980) (addressing Fourteenth Amendment limitation on state-court jurisdiction). As the Court stated in Pacific Ins. Co., supra: "[T]he full faith and credit clause does not require one state to substitute for its own statute, applicable to persons and events within it, the conflicting statute of another state." Id., at 502 (emphasis added). The State has a legitimate interest in applying a rule of decision to the litigation only if the facts to which the rule will be applied have created effects within the State, toward which the State's public policy is directed. To assess the sufficiency of asserted contacts between the forum and the litigation, the court must determine if the contacts form a reasonable link between the litigation and a state policy. In short, examination of contacts addresses whether "the state [335] has an interest in the application of its policy in this instance." Currie, The Constitution and the Choice of Law: Governmental Interests and the Judicial Function, in B. Currie, Selected Essays on the Conflict of Laws 188, 189 (1963) (Currie). If it does, the Constitution is satisfied.

John Hancock Mut. Life Ins. Co. v. Yates, 299 U. S. 178 (1936), illustrates this principle. A life insurance policy was executed in New York, on a New York insured with a New York beneficiary. The insured died in New York; his beneficiary moved to Georgia and sued to recover on the policy. The insurance company defended on the ground that the insured, in the application for the policy, had made materially false statements that rendered it void under New York law. This Court reversed the Georgia court's application of its contrary rule that all questions of the policy's validity must be determined by the jury. The Court found a violation of the Full Faith and Credit Clause, because "[i]n respect to the accrual of the right asserted under the contract . . . there was no occurrence, nothing done, to which the law of Georgia could apply." Id., at 182. In other words, the Court determined that Georgia had no legitimate interest in applying its own law to the legal issue of liability. Georgia's contacts with the contract of insurance were nonexistent.^[56] See Home Ins. Co. v. Dick, 281 U. S. 397, 408 (1930).

In summary, the significance of the contacts between a forum State and the litigation must be assessed in light of [336] these two important constitutional policies.^[57] A contact, or a pattern of contacts, satisfies the Constitution when it protects the litigants from being unfairly surprised if the forum State applies its own law, and when the application of the forum's law reasonably can be understood to further a legitimate public policy of the forum State.

II

Recognition of the complexity of the constitutional inquiry requires that this Court apply these principles with restraint. Applying these principles to the facts of this case, I do not believe, however, that Minnesota had sufficient contacts with the "persons and events" in this litigation to apply its rule permitting stacking. I would agree that no reasonable expectations of the parties were frustrated. The risk insured by petitioner was not geographically limited. See Clay v. Sun Ins. Office, Ltd., 377 U. S., at 182. The close proximity of Hager City, Wis., to Minnesota, and the fact that Hague commuted daily to Red Wing, Minn., for many years should have led the insurer to realize that there was a reasonable probability that the risk would materialize in Minnesota. Under our precedents, it is plain that Minnesota could have applied its own law to an accident occurring within its borders. See ante, at 318, n. 24. The fact that the accident did not, in fact, occur in Minnesota is not controlling because the expectations of the litigants before the cause of [337] action accrues provide the pertinent perspective. See Weintraub 455; n. 1, supra.

The more doubtful question in this case is whether application of Minnesota's substantive law reasonably furthers a legitimate state interest. The plurality attempts to give substance to the tenuous contacts between Minnesota and this litigation. Upon examination, however, these contacts are either trivial or irrelevant to the furthering of any public policy of Minnesota.

First, the post accident residence of the plaintiff-beneficiary is constitutionally irrelevant to the choice-of-law question. John Hancock Mut. Life Ins. Co. v. Yates, supra. The plurality today insists that Yates only held that a postoccurrence move to the forum State could not "in and of itself" confer power on the forum to apply its own law, but did not establish that such a change of residence was irrelevant. Ante, at 319. What the Yates Court held, however, was that "there was no occurrence, nothing done, to which the law of Georgia could apply." 299 U. S., at 182 (emphasis added). Any possible ambiguity in the Court's view of the significance of a postoccurrence change of residence is dispelled by Home Ins. Co. v. Dick, supra, cited by the Yates Court, where it was held squarely that Dick's post accident move to the forum State was "without significance." 281 U. S., at 408.

This rule is sound. If a plaintiff could choose the substantive rules to be applied to an action by moving to a hospitable forum, the invitation to forum shopping would be irresistible. Moreover, it would permit the defendant's reasonable expectations at the time the cause of action accrues to be frustrated, because it would permit the choice-of-law question to turn on a postaccrual circumstance. Finally, postaccrual residence has nothing to do with facts to which the forum State proposes to apply its rule; it is unrelated to the substantive legal issues presented by the litigation.

Second, the plurality finds it significant that the insurer does business in the forum State. Ante, at 317-318. The State [338] does have a legitimate interest in regulating the practices of such an insurer. But this argument proves too much. The insurer here does business in all 50 States. The forum State has no interest in regulating that conduct of the insurer unrelated to property, persons, or contracts executed within the forum State.^[58] See Hoopeston Canning Co. v. Cullen, 318 U. S. 313, 319 (1943). The plurality recognizes this flaw and attempts to bolster the significance of the local presence of the insurer by combining it with the other factors deemed significant: the presence of the plaintiff and the fact that the deceased worked in the forum State. This merely restates the basic question in the case.

Third, the plurality emphasizes particularly that the insured worked in the forum State.^[59] Ante, at 313-317. The fact that the insured was a nonresident employee in the forum [339] State provides a significant contact for the furtherance of some local policies. See, e. g., Pacific Ins. Co. v. Industrial Accident Comm'n, 306 U. S. 493 (1939) (forum State's interest in compensating workers for employment-related injuries occurring within the State); Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532, 549 (1935) (forum State's interest in compensating the employment-related injuries of a worker hired in the State). The insured's place of employment is not, however, significant in this case. Neither the nature of the insurance policy, the events related to the accident, nor the immediate question of stacking coverage is in any way affected or implicated by the insured's employment status. The plurality's opinion is understandably vague in explaining how trebling the benefits to be paid to the estate of a nonresident employee furthers any substantial state interest relating to employment. Minnesota does not wish its workers to die in automobile accidents, but permitting stacking will not further this interest. The substantive issue here is solely one of compensation, and whether the compensation provided by this policy is increased or not will have no relation to the State's employment policies or police power. See n. 5, supra.

Neither taken separately nor in the aggregate do the contacts asserted by the plurality today indicate that Minnesota's application of its substantive rule in this case will further any legitimate state interest.^[60] The plurality focuses [340] only on physical contacts vel non, and in doing so pays scant attention to the more fundamental reasons why our precedents require reasonable policy-related contacts in choice-of-law cases. Therefore, I dissent.

[1] The Due Process Clause of the Fourteenth Amendment provides that no State "shall . . . deprive any person of life, liberty, or property, without due process of law . . . ."

[2]The Full Faith and Credit Clause, Art. IV, § 1, provides:

"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."

[3] Ralph Hague paid a separate premium for each automobile including an additional separate premium for each uninsured motorist coverage.

[4] App. C to Pet. for Cert. A-29.

[5] 289 N. W. 2d 43 (1978).

[6] Respondent has suggested that this case presents a "false conflict." The court below rejected this contention and applied Minnesota law. Even though the Minnesota Supreme Court's choice of Minnesota law followed a discussion of whether this case presents a false conflict, the fact is that the court chose to apply Minnesota law. Thus, the only question before this Court is whether that choice was constitutional.

[7] Minnesota had previously adopted the conceptual model developed by Professor Leflar in Milkovich v. Saari, 295 Minn. 155, 203 N. W. 2d 408 (1973).

[8] The court apparently was referring to sufficiency as a matter of choice of law and not as a matter of constitutional limitation on its choice-of-law decision.

[9] 289 N. W. 2d, at 50 (1979).

[10] This Court has taken a similar approach in deciding choice-of-law cases under both the Due Process Clause and the Full Faith and Credit Clause. In each instance, the Court has examined the relevant contacts and resulting interests of the State whose law was applied. See, e. g., Nevada v. Hall, 440 U. S. 410, 424 (1979). Although at one time the Court required a more exacting standard under the Full Faith and Credit Clause than under the Due Process Clause for evaluating the constitutionality of choice-of-law decisions, see Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532, 549-550 (1935) (interest of State whose law was applied was no less than interest of State whose law was rejected), the Court has since abandoned the weighing-of-interests requirement. Carroll v. Lanza, 349 U. S. 408 (1955); see Nevada v. Hall, supra; Weintraub, Due Process and Full Faith and Credit Limitations on a State's Choice of Law, 44 Iowa L. Rev. 449 (1959). Different considerations are of course at issue when full faith and credit is to be accorded to acts, records, and proceedings outside the choice-of-law area, such as in the case of sister state-court judgments.

[11] Prior to the advent of interest analysis in the state courts as the "dominant mode of analysis in modern choice of law theory," Silberman, Shaffer v. Heitner: The End of an Era, 53 N. Y. U. L. Rev. 33, 80, n. 259 (1978); cf. Richards v. United States, 369 U. S. 1, 11-13, and nn. 26-27 (1962) (discussing trend toward interest analysis in state courts), the prevailing choice-of-law methodology focused on the jurisdiction where a particular event occurred. See, e. g., Restatement of Conflict of Laws (1934). For example, in cases characterized as contract cases, the law of the place of contracting controlled the determination of such issues as capacity, fraud, consideration, duty, performance, and the like. Id., § 332; see Beale, What Law Governs the Validity of a Contract, 23 Harv. L. Rev. 260, 270-271 (1910). In the tort context, the law of the place of the wrong usually governed traditional choice-of-law analysis. Restatement, supra, § 378; see Richards v. United States, supra,at 11-12.

Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., 292 U. S. 143 (1934), can, perhaps, best be explained as an example of that period. In that case, the Court struck down application by the Mississippi courts of Mississippi law which voided the limitations provision in a fidelity bond written in Tennessee between a Connecticut insurer and Delta, both of which were doing business in Tennessee and Mississippi. By its terms, the bond covered misapplication of funds "by any employee `in any position, anywhere . . . .'" Id., at 145. After Delta discovered defalcations by one of its Mississippi-based employees, a lawsuit was commenced in Mississippi.

That case, however, has scant relevance for today. It implied a choice-of-law analysis which, for all intents and purposes, gave an isolated event— the writing of the bond in Tennessee—controlling constitutional significance, even though there might have been contacts with another State (there Mississippi) which would make application of its law neither unfair nor unexpected. See Martin, Personal Jurisdiction and Choice of Law, 78 Mich. L. Rev. 872, 874, and n. 11 (1980).

[12] Dick sought to obtain quasi-in-rem jurisdiction by garnishing the reinsurance obligation of the New York reinsurer. The reinsurer had never transacted business in Texas, but it "was cited by publication, in accordance with a Texas statute; attorneys were appointed for it by the trial court; and they filed on its behalf an answer which denied liability." 281 U. S., at 402. There would be no jurisdiction in the Texas courts to entertain such a lawsuit today. See Rush v. Savchuk, 444 U. S. 320 (1980); Shaffer v. Heitner, 433 U. S. 186 (1977); Silberman, supra, at 62-65.

[13] The Court noted that the result might have been different if there had been some connection to Texas upon "which the State could properly lay hold as the basis of the regulations there imposed." 281 U. S., at 408, n. 5; see Watson v. Employers Liability Assurance Corp., 348 U. S. 66, 71 (1954).

[14] See generally, Weintraub, supra n. 10, at 455-457.

[15] The Court found no violation of the Full Faith and Credit Clause, since California's interest was considered to be no less than Alaska's, 294 U. S., at 547-548, 549-550, even though the injury occurred in Alaska while the employee was performing his contract obligations there. While Alaska Packers balanced the interests of California and Alaska to determine the full faith and credit issue, such balancing is no longer required. See Nevada v. Hall, 440 U. S., at 424; n. 10, supra.

[16] The precise question raised was whether the Virginia Compensation Commission "had sole jurisdiction over the claim." 330 U. S., at 472-473. In finding that application of the District's law did not violate either due process or full faith and credit requirements, the Court in effect treated the question as a constitutional choice-of-law issue.

[17] The Court has upheld choice-of-law decisions challenged on constitutional grounds in numerous other decisions. See Nevada v. Hall, supra (upholding California's application of California law to automobile accident in California between two California residents and a Nevada official driving car owned by State of Nevada while engaged in official business in California); Carroll v. Lanza, 349 U. S. 408 (1955) (upholding Arkansas' choice of Arkansas law where Missouri employee executed employment contract with Missouri employer and was injured on job in Arkansas but was removed immediately to a Missouri hospital); Watson v. Employers Liability Assurance Corp., 348 U. S. 66 (1954) (allowing application of Louisiana direct action statute by Louisiana resident against insurer even though policy was written and delivered in another State, where plaintiff was injured in Louisiana); Pacific Employers Ins. Co. v. Industrial Accident Comm'n, 306 U. S. 493 (1939) (holding Full Faith and Credit Clause not violated where California applied own Workmen's Compensation Act in case of injury suffered by Massachusetts employee temporarily in California in course of employment). Thus, Nevada v. Hall, supra, and Watson v. Employers Liability Assurance Corp., supra, upheld application of forum law where the relevant contacts consisted of plaintiff's residence and the place of the injury. Pacific Employers Ins. Co. v. Industrial Accident Comm'n, supra, and Carroll v. Lanza, supra, relied on the place of the injury arising from the respective employee's temporary presence in the forum State in connection with his employment.

[18] The policy issued to Mr. Hague provided that Allstate would pay to the insured, or his legal representative, damages "sustained by the insured, caused by accident and arising out of the ownership, maintenance or use of [an] uninsured automobile. . . ." No suggestion has been made that Mr. Hague's uninsured motorist protection is unavailable because he was not killed while driving one of his insured automobiles.

[19] Numerous cases have applied the law of a jurisdiction other than the situs of the injury where there existed some other link between that jurisdiction and the occurrence. See, e. g., Cardillo v. Liberty Mutual Ins. Co., 330 U. S. 469 (1947); Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532 (1935); Rosenthal v. Warren, 475 F. 2d 438 (CA2), cert. denied, 414 U. S. 856 (1973); Clark v. Clark, 107 N. H. 351, 222 A. 2d 205 (1966); Tooker v. Lopez, 24 N. Y. 2d 569, 249 N. E. 2d 394 (1969); Babcock v. Jackson, 12 N. Y. 2d 473, 191 N. E. 2d 279 (1963).

[20] The injury or death of a resident of State A in State B is a contact of State A with the occurrence in State B. See cases cited in n. 19, supra.

[21]Petitioner's statement that the instant dispute involves the interpretation of insurance contracts which were "underwritten, applied for, and paid for by Wisconsin residents and issued covering cars garaged in Wisconsin," Brief for Petitioner 6, is simply another way of stating that Mr. Hague was a Wisconsin resident. Respondent could have replied that the insurance contract was underwritten, applied for and paid for by a Minnesota worker, and issued covering cars that were driven to work in Minnesota and garaged there for a substantial portion of the day. The former statement is hardly more significant than the latter since the accident in any event did not involve any of the automobiles which were covered under Mr. Hague's policy. Recovery is sought pursuant to the uninsured motorist coverage.

In addition, petitioner's statement that the contracts were "underwritten. . . by Wisconsin residents" is not supported by the stipulated facts if petitioner means to include itself within that phrase. Indeed, the policy, which is part of the record, recites that Allstate signed the policy in Northbrook, Ill. Under some versions of the hoary rule of lex loci contractus, and depending on the precise sequence of events, a sequence which is unclear from the record before us, the law of Illinois arguably might apply to govern contract construction, even though Illinois would have less contact with the parties and the occurrence than either Wisconsin or Minnesota. No party sought application of Illinois law on that basis in the court below.

[22] Of course Allstate could not be certain that Wisconsin law would necessarily govern any accident which occurred in Wisconsin, whether brought in the Wisconsin courts or elsewhere. Such an expectation would give controlling significance to the wooden lex loci delicti doctrine. While the place of the accident is a factor to be considered in choice-of-law analysis, to apply blindly the traditional, but now largely abandoned, doctrine, Silberman, supra n. 11, at 80, n. 259; see n. 11, supra, would fail to distinguish between the relative importance of various legal issues involved in a lawsuit as well as the relationship of other jurisdictions to the parties and the occurrence or transaction. If, for example, Mr. Hague had been a Wisconsin resident and employee who was injured in Wisconsin and was then taken by ambulance to a hospital in Red Wing, Minn., where he languished for several weeks before dying, Minnesota's interest in ensuring that its medical creditors were paid would be obvious. Moreover, under such circumstances, the accident itself might be reasonably characterized as a bistate occurrence beginning in Wisconsin and ending in Minnesota. Thus, reliance by the insurer that Wisconsin law would necessarily govern any accident that occurred in Wisconsin, or that the law of another jurisdiction would necessarily govern any accident that did not occur in Wisconsin, would be unwarranted. See n. 11, supra; cf. Rosenthal v. Warren, supra(Massachusetts hospital could not have purchased insurance with expectation that Massachusetts law would govern damages recovery as to New York patient who died in hospital and whose widow brought suit in New York).

If the law of a jurisdiction other than Wisconsin did govern, there was a substantial likelihood, with respect to uninsured motorist coverage, that stacking would be allowed. Stacking was the rule in most States at the time the policy was issued. Indeed, the Wisconsin Supreme Court, in Nelson v. Employers Mutual Casualty Co., 63 Wis. 2d 558, 563-566, and nn. 2, 3, 217 N. W. 2d 670, 672, 674, and nn. 2, 3 (1974), identified 29 States, including Minnesota, whose law it interpreted to allow stacking, and only 9 States whose law it interpreted to prohibit stacking. Clearly then, Allstate could not have expected that an antistacking rule would govern any particular accident in which the insured might be involved and thus cannot claim unfair surprise from the Minnesota Supreme Court's choice of forum law.

[23] The Court has recognized that examination of a State's contacts may result in divergent conclusions for jurisdiction and choice-of-law purposes. See Kulko v. California Superior Court, 436 U. S. 84, 98 (1978) (no jurisdiction in California but California law "arguably might" apply); Shaffer v. Heitner, 433 U. S., at 215 (no jurisdiction in Delaware, although Delaware interest "may support the application of Delaware law"); cf. Hanson v. Denckla, 357 U. S. 235, 254, and n. 27 (1958) (no jurisdiction in Florida; the "issue is personal jurisdiction, not choice of law," an issue which the Court found no need to decide). Nevertheless, "both inquiries `are often closely related and to a substantial degree depend upon similar considerations.'" Shaffer, 433 U. S., at 224-225 (BRENNAN, J., concurring in part and dissenting in part). Here, of course, jurisdiction in the Minnesota courts is unquestioned, a factor not without significance in assessing the constitutionality of Minnesota's choice of its own substantive law. Cf. id., at 225 ("the decision that it is fair to bind a defendant by a State's laws and rules should prove to be highly relevant to the fairness of permitting that same State to accept jurisdiction for adjudicating the controversy").

[24] There is no element of unfair surprise or frustration of legitimate expectations as a result of Minnesota's choice of its law. Because Allstate was doing business in Minnesota and was undoubtedly aware that Mr. Hague was a Minnesota employee, it had to have anticipated that Minnesota law might apply to an accident in which Mr. Hague was involved. See Clay II, 377 U. S. 179, 182 (1964); Watson v. Employers Liability Assurance Corp., 348 U. S., at 72-73; Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S., at 538-543; cf. Home Ins. Co. v. Dick, 281 U. S., at 404 (neither insurer nor reinsurer present in forum State). Indeed, Allstate specifically anticipated that Mr. Hague might suffer an accident either in Minnesota or elsewhere in the United States, outside of Wisconsin, since the policy it issued offered continental coverage. Cf. id., at 403 (coverage limited to losses occurring in certain Mexican waters which were outside of jurisdiction whose law was applied). At the same time, Allstate did not seek to control construction of the contract since the policy contained no choice-of-law clause dictating application of Wisconsin law. See Clay II, supra, at 182 (nationwide coverage of policy and lack of choice-of-law clause).

[25] Justice Black's dissent in the first Clay decision, a decision which vacated and remanded a lower-court determination to obtain an authoritative construction of state law that might moot the constitutional question, subsequently commanded majority support in the second Clay decision. Clay II, supra, at 180-183.

[26] The stipulated facts do not reveal the date on which Mrs. Hague first moved to Red Wing.

[27] These proceedings began on May 28, 1976. Mrs. Hague was remarried on June 19, 1976.

[28] The dissent suggests that considering respondent's postoccurrence change of residence as one of the Minnesota contacts will encourage forum shopping. Post, at 337. This overlooks the fact that her change of residence was bona fide and not motivated by litigation considerations.

[29] We express no view whether the first two contacts, either together or separately, would have sufficed to sustain the choice of Minnesota law made by the Minnesota Supreme Court.

[30]Article IV, § 1, provides:

"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."

[31]Section 1 of the Fourteenth Amendment provides, in part:

"No State shall . . . deprive any person of life, liberty, or property, without due process of law . . . ."

[32] The two questions presented by the choice-of-law issue arise only after it is assumed or established that the defendant's contacts with the forum State are sufficient to support personal jurisdiction. Although the choice-of-law concerns—respect for another sovereign and fairness to the litigants —are similar to the two functions performed by the jurisdictional inquiry, they are not identical. In World-Wide Volkswagen Corp. v. Woodson,444 U. S. 286, 291-292 (1980), we stated:

"The concept of minimum contacts, in turn, can be seen to perform two related, but distinguishable, functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States, through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system."

See also Reese, Legislative Jurisdiction, 78 Column. L. Rev. 1587, 1589-1590 (1978). While it has been suggested that this same minimum-contacts analysis be used to define the constitutional limitations on choice of law, see, e. g., Martin, Personal Jurisdiction and Choice of Law, 78 Mich. L. Rev. 872 (1980), the Court has made it clear over the years that the personal jurisdiction and choice-of-law inquiries are not the same. See Kulko v. California Superior Court, 436 U. S. 84, 98 (1978); Shaffer v. Heitner, 433 U. S. 186, 215 (1977); id., at 224-226 (BRENNAN, J., dissenting in part); Hanson v. Denckla, 357 U. S. 235, 253-254 (1958); id., at 258 (Black, J., dissenting).

[33] Although the Court has struck down a state court's choice of forum law on both due process, see, e. g., Home Ins. Co. v. Dick, 281 U. S. 397 (1930), and full faith and credit grounds, see, e. g., John Hancock Mutual Life Ins. Co. v. Yates, 299 U. S. 178 (1936), no clear analytical distinction between the two constitutional provisions has emerged. The Full Faith and Credit Clause, of course, was inapplicable in Home Ins. Co. because the law of a foreign nation, rather than of a sister State, was at issue; a similarly clear explanation for the Court's reliance upon the Full Faith and Credit Clause in John Hancock Mutual Life Ins. cannot be found. Indeed, John Hancock Mutual Life Ins. is probably best understood as a due process case. See Reese, supra, at 1589, and n. 17; Weintraub, Due Process and Full Faith and Credit Limitations on a State's Choice of Law, 44 Iowa L. Rev. 449, 457-458 (1959).

[34] See R. Leflar, American Conflicts Law § 5, p. 7, § 55, pp. 106-107 (3d ed. 1977). The Court's frequent failure to distinguish between the two Clauses in the choice-of-law context may underlie the suggestions of various commentators that either the Full Faith and Credit Clause or the Due Process Clause be recognized as the single appropriate source for constitutional limitations on choice of law. Compare Martin, Constitutional Limitations on Choice of Law, 61 Cornell L. Rev. 185 (1976) (full faith and credit), with Reese, supra (due process); see also Kirgis, The Roles of Due Process and Full Faith and Credit in Choice of Law, 62 Cornell L. Rev. 94 (1976).

[35] Even when the Court has explicitly considered both provisions in a single case, the requirements of the Due Process and Full Faith and Credit Clauses have been measured by essentially the same standard. For example, in Watson v. Employers Liability Assurance Corp., 348 U. S. 66 (1954), the Court separately considered the due process and full faith and credit questions. See id., at 70-73. However, in concluding that the Full Faith and Credit Clause did not bar the Louisiana courts from applying Louisiana law in that case, the Court substantially relied upon its preceding analysis of the requirements of due process. Id., at 73. By way of contrast, in Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532, 544-550 (1935), the Court's full faith and credit analysis differed significantly from its due process analysis. However, as noted in the plurality opinion, ante, at 308, n. 10, the Court has since abandoned the full faith and credit standard represented by Alaska Packers.

[36] See also Sumner, The Full-Faith-and-Credit-Clause—Its History and Purpose, 34 Or. L. Rev. 224, 242 (1955); Weintraub, supra, at 477; R. Leflar, supra, § 73, p. 143.

[37] As the Court observed in Alaska Packers, supra,an overly rigid application of the Full Faith and Credit Clause would produce anomalous results:

"A rigid and literal enforcement of the full faith and credit clause, without regard to the statute of the forum, would lead to the absurd result that, wherever the conflict arises, the statute of each state must be enforced in the courts of the other, but cannot be in its own." 294 U. S., at 547.

[38] For example, it is well established that "the Full Faith and Credit Clause does not require a State to apply another State's law in violation of its own legitimate public policy." Nevada v. Hall, 440 U. S. 410, 422 (1979) (footnote omitted).

[39] The kind of state action the Full Faith and Credit Clause was designed to prevent has been described in a variety of ways by this Court. In Carroll v. Lanza, 349 U. S. 408, 413 (1955), the Court indicated that the Clause would be invoked to restrain "any policy of hostility to the public Acts" of another State. In Nevada v. Hall, supra, at 424, n. 24, we approved action which "pose[d] no substantial threat to our constitutional system of cooperative federalism." And in Thomas v. Washington Gas Light Co., 448 U. S. 261, 272 (1980), the plurality opinion described the purpose of the Full Faith and Credit Clause as the prevention of "parochial entrenchment on the interests of other States."

[40] While the justifiable expectations of the litigants are a major concern for purposes of due process scrutiny of choice-of-law decisions, see Part II, infra, the decision in John Hancock Mutual Life Ins. Co. v. Yates, 299 U. S. 178 (1936), suggests that this concern may also implicate state interests cognizable under the Full Faith and Credit Clause. In John Hancock Mutual Life Ins., the Court struck down on full faith and credit grounds a Georgia court's choice of Georgia law over a conflicting New York statute in a suit on a New York life insurance contract brought after the insured's death in New York. Central to the decision in that case was the Court's apparent concern that application of Georgia law would result in unfair surprise to one of the contracting parties. The Court found that the New York statute was "a rule of substantive law which became a term of the contract, as much so as the amount of the premium to be paid or the time for its payment." Id., at 182 (footnote omitted). This statute "determine[d] the substantive rights of the parties as fully as if a provision to that effect had been embodied in writing in the policy." Id.,at 182-183. The insurer had no reason to expect that the New York statute would not control all claims arising under the life insurance policy. The parties to a life insurance contract normally would not expect the place of death to have any bearing upon the proper construction of the policy; by way of contrast, in the case of a liability policy, the place of the tort might well be relevant. For that reason, in a life insurance contract relationship, it is likely that neither party would expect the law of any State other than the place of contracting to have any relevance in possible subsequent litigation. See generally C. Carnahan, Conflict of Laws and Life Insurance Contracts § 15, pp. 51-52, § 47, pp. 264-265, 267-268, § 60, pp. 325-327 (2d ed. 1958).

Paul Freund has aptly characterized John Hancock Mutual Life Ins. as perhaps this Court's "most ambitious application of the full faith and credit clause." Freund, Chief Justice Stone and the Conflict of Laws, 59 Harv. L. Rev. 1210, 1233 (1946). Like Bradford Electric Light Co. v. Clapper, 286 U. S. 145 (1932), on which the Court relied, see 299 U. S., at 183, John Hancock Mutual Life Ins. was one of a series of constitutional decisions in the 1930's that have been limited by subsequent cases. See Carroll v. Lanza, 349 U. S., at 412; Thomas v. Washington Gas Light Co., supra, at 272-273, n. 18 (plurality opinion). See also Traynor, Is This Conflict Really Necessary?, 37 Texas L. Rev. 657, 675 (1959).

[41] Compare Nevada v. Hall, supra, in which the Court permitted a California court to disregard Nevada's statutory limitation on damages available against the State. The Court found this direct intrusion upon Nevada's sovereignty justified because the Nevada statute was "obnoxious" to California's public policy. Id., at 424.

[42] It is clear that a litigant challenging the forum's application of its own law to a lawsuit properly brought in its courts bears the burden of establishing that this choice of law infringes upon interests protected by the Full Faith and Credit Clause. See Alaska Packers Assn. v. Industrial Accident Comm'n,294 U. S., at 547-548.

It is equally clear that a state court's decision to apply its own law cannot violate the Full Faith and Credit Clause where the application of forum law does not impinge at all upon the interests of other States. Cf. Reese, supra n. 3, at 1601.

[43] This task can be particularly difficult for a trial judge who does not have ready access to a law library containing the statutes and decisions of all 50 States. If that judge is able to apply law with which he is thoroughly familiar or can easily discover, substantial savings can accrue to the State's judicial system. Moreover, an erroneous interpretation of the governing rule is less likely when the judge is applying a familiar rule. Cf. Shaffer v. Heitner, 433 U. S., at 225-226 (BRENNAN, J., dissenting in part) (such concerns indicate that a State's ability to apply its own law to a transaction should be relevant for purposes of evaluating its power to exercise jurisdiction over the parties to that transaction).

[44] Discrimination against nonresident would be constitutionally suspect even if the Due Process Clause were not a check upon a State's choice-of-law decisions. See Currie & Schreter, Unconstitutional Discrimination in the Conflict of Laws: Equal Protection, 28 U. Chi. L. Rev. 1 (1960); Currie & Schreter, Unconstitutional Discrimination in the Conflict of Laws: Privileges and Immunities, 69 Yale L. J. 1323 (1960); Note, Unconstitutional Discrimination in Choice of Law, 77 Colum. L. Rev. 272 (1977). Moreover, both discriminatory and substantively unfair rules of law may be detected and remedied without any special choice-of-law analysis; familiar constitutional principles are available to deal with both varieties of unfairness. See, e. g., Martin, supra n. 5, at 199.

[45] Upon careful analysis, most of the decisions of this Court that struck down on due process grounds a state court's choice of forum law can be explained as attempts to prevent a State with a minimal contact with the litigation from materially enlarging the contractual obligations of one of the parties where that party had no reason to anticipate the possibility of such enlargement. See, e. g., Home Ins. Co. v. Dick, 281 U. S. 397 (1930); Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., 292 U. S. 143 (1934); cf. John Hancock Mutual Life Ins. Co. v. Yates, 299 U. S. 178 (1936) (similar concern under Full Faith and Credit Clause, see n. 11, supra). See generally Weintraub, supra n. 4, at 457-460.

[46] See also Nelson v. Employers Mutual Casualty Co., 63 Wis. 2d 558, 563-566, and nn. 2, 3, 217 N. W. 2d 670, 672-674, and nn. 2, 3 (1974), discussed ante, at 316-317, n. 22.

[47] The "stacking" rule provides that all of the uninsured motorist coverage purchased by an insured party may be aggregated, or "stacked," to create a fund available to provide a recovery for a single accident.

[48] For example, in Home Ins. Co. v. Dick, supra, at 403, and n. 1, the insurance policy was subject, by its express terms, to Mexican law.

[49] Home Ins. Co., supra, again provides a useful example. In that case, the insurance policy expressly provided a 1-year limitations period for claims arising thereunder. Id., at 403. Similarly, the insurance policy at issue in Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., supra,at 146, also prescribed a specific limitations period.

While such express provisions are obviously relevant, they are not always dispositive. In Clay v. Sun Insurance Office, Ltd., 377 U. S. 179 (1964), the Court allowed the lower court's choice of forum law to override an express contractual limitations period. The Court emphasized the fact that the insurer had issued the insurance policy with the knowledge that it would cover the insured property wherever it was taken. Id., at 181-182. The Court also noted that the insurer had not attempted to provide in the policy that the law of another State would control. Id., at 182.

In Watson v. Employers Liability Assurance Corp., 348 U. S., at 68, the insurance policy expressly provided that an injured party could not maintain a direct action against the insurer until after the insured's liability had been determined. The Court found that neither the Due Process Clause nor the Full Faith and Credit Clause prevented the Louisiana courts from applying forum law to permit a direct action against the insurer prior to determination of the insured's liability. As in Clay, the Court noted that the policy provided coverage for injuries anywhere in the United States. 348 U. S., at 71-72. An additional, although unarticulated, factor in Watson was the fact that the litigant urging that forum law be applied was not a party to the insurance contract. While contracting parties may be able to provide in advance that a particular rule of law will govern disputes between them, their expectations are clearly entitled to less weight when the rights of third-party litigants are at issue.

[50] In Home Ins. Co., supra, the insurance policy was issued in Mexico by a Mexican corporation and covered the insured vessel only in certain Mexican waters. Id., at 403.

[51] In Clay v. Sun Insurance Office, Ltd., supra, at 182, and Watson v. Employers Liability Assurance Corp., supra, at 71-72, the Court considered it significant, in upholding the lower courts' choice of forum law, that the insurance policies provided coverage throughout the United States. See n. 20, supra. Of course, in both Clay and Watson the loss to which the insurance applied actually occurred in the forum State, whereas the accident in this case occurred in Wisconsin not Minnesota. However, as the dissent recognizes, post,at 336-337, because the question on the merits is one of contract interpretation rather than tort liability, the actual site of the accident is not dispositive with respect to the due process inquiry. More relevant is the fact that the parties, at the time of contracting, anticipated that an accident covered by the policy could occur in a "stacking" State. The fact that this particular accident did not occur in Minnesota does not undercut the expectations formed by the parties at the time of contracting.

In Hartford Accident & Indemnity Co. v. Delta & Pine Land Co., supra, the Court struck down a state court's choice of forum law despite the fact that the insurance contract's coverage was not limited by state boundaries. While Hartford Accident may indeed have "scant relevance for today," ante, at 309, n. 11, it is nonetheless consistent with a due process analysis based upon fundamental fairness to the parties. One of the statutes applied by the Mississippi courts in Hartford Accident was offensively broad, providing that "[a]ll contracts of insurance on property, lives or interests in this state shall be deemed to be made therein." 292 U. S., at 148. No similar statute is involved in this case. In addition, the Mississippi courts applied the law of the forum to override an express contractual provision, and thus frustrated the expectations of the contracting parties. In the present case, the insurance contract contains no similar declaration of the intent of the parties.

[52] Comparison of this case with Home Ins. Co. v. Dick, 281 U. S. 397 (1930), confirms my conclusion that the application of Minnesota law in this case does not offend the Due Process Clause. In Home Ins. Co., the contract expressly provided that a particular limitations period would govern claims arising under the insurance contract and that Mexican law was to be applied in interpreting the contract; in addition, the contract was limited in effect to certain Mexican waters. The parties could hardly have made their expectations with respect to the applicable law more plain. In this case, by way of contrast, nothing in the contract suggests that Wisconsin law should be applied or that Minnesota's "stacking" rule should not be applied. In this case, unlike Home Ins. Co., the court's choice of forum law results in no unfair surprise to the insurer.

[53] Even this factor may not be of substantial significance. At the time of contracting, the parties were aware that the insurance policy was effective throughout the United States and that the law of any State, including Minnesota, might be applicable to particular claims. The fact that the decedent regularly drove to Minnesota, for whatever purpose, is relevant only to the extent that it affected the parties' evaluation, at the time of contracting, of the likelihood that Minnesota law would actually be applied at some point in the future. However, because the applicability of Minnesota law was perceived as possible at the time of contracting, it does not seem especially significant for due process purposes that the parties may also have considered it likely that Minnesota law would be applied. This factor merely reinforces the expectation revealed by the policy's national coverage.

[54] In Kryger v. Wilson,242 U. S. 171, 176 (1916), after rejecting a due process challenge to a state court's choice of law, the Court stated:

"The most that the plaintiff in error can say is that the state court made a mistaken application of doctrines of the conflict of laws in deciding that the cancellation of a land contract is governed by the law of the situs instead of the place of making and performance. But that, being purely a question of local common law, is a matter with which this court is not concerned."

[55] Home Ins. Co. v. Dick, 281 U. S. 397 (1930), is a case where the reasonable expectations of a litigant were frustrated. The insurance contract confined the risk to Mexico, where the loss occurred and where both the insurer and the insured resided until the claim accrued. This Court found a violation of the Due Process Clause when Texas, the forum State, applied a local rule to allow the insured to gain a recovery unavailable under Mexican law. Because of the geographic limitation on the risk, and because there were no contacts with the forum State until the claim accrued, the insurer could have had no reasonable expectation that Texas law would be applied to interpret its obligations under the contract. See Weintraub 455.

[56] "It is manifest that Georgia had no interest in the application to this case of any policy to be found in its laws. When the contract was entered into, and at all times until the insured died, the parties and the transaction were beyond the legitimate reach of whatever policy Georgia may have had. Any interest asserted by Georgia must relate to the circumstance that the action is tried there, and must arise not from any policy directed to the business of life insurance but from some policy having to do with the business of the courts. This was apparently recognized even by the Georgia court; hence the disingenuous characterization of the matter as one of `procedure' rather than of `substance.'" Currie 236. See also id., at 232-233.

[57] The plurality today apparently recognizes that the significance of the contacts must be evaluated in light of the policies our review serves. It acknowledges that the sufficiency of the same contacts sometimes will differ in jurisdiction and choice-of-law questions. Ante, at 317, n. 23. The plurality, however, pursues the rationale for the requirement of sufficient contacts in choice-of-law cases no further than to observe that the forum's application of its own law must be "neither arbitrary nor fundamentally unfair." Ante, at 313. But this general prohibition does not distinguish questions of choice of law from those of jurisdiction, or from much of the jurisprudence of the Fourteenth Amendment.

[58] The petitioner in John Hancock Mut. Life Ins. Co. v. Yates, 299 U. S. 178 (1936), did business in Georgia, the forum State, at the time of that case. See The Insurance Almanac 715 (1935). Also, Georgia extensively regulated insurance practices within the State at that time. See Ga. Code § 56-101 et seq. (1933). This Court did not hint in Yates that this fact was of the slightest significance to the choice-of-law question, although it would have been crucial for the exercise of in personam jurisdiction.

[59] The plurality exacts double service from this fact, by finding a separate contact in that the insured commuted daily to his job. Ante,at 314-315. This is merely a repetition of the facts that the insured lived in Wisconsin and worked in Minnesota. The State does have an interest in the safety of motorists who use its roads. This interest is not limited to employees, but extends to all nonresident motorists on its highways. This safety interest, however, cannot encompass, either in logic or in any practical sense, the determination whether a nonresident's estate can stack benefit coverage in a policy written in another State regarding an accident that occurred on another State's roads.

Cardillo v. Liberty Mutual Ins. Co., 330 U. S. 469 (1947), hardly establishes commutation as an independent contact; the case merely approved the application of a forum State's law to an industrial accident occurring in a neighboring State when the employer and the employee both resided in the forum State.

[60] The opinion of JUSTICE STEVENS concurring in the judgment supports my view that the forum State's application of its own law to this case cannot be justified by the existence of relevant minimum contacts. As JUSTICE STEVENS observes, the principal factors relied on by the plurality are "either irrelevant to or possibly even tend to undermine the [plurality's] conclusion." Ante. at 331. The interesting analysis he proposes to uphold the State's judgment is, however, difficult to reconcile with our prior decisions and may create more problems than it solves. For example, it seems questionable to measure the interest of a State in a controversy by the degree of conscious reliance on that State's law by private parties to a contract Ante, at 324. Moreover, scrutinizing the strength of the interests of a nonforum State may draw this Court back into the discredited practice of weighing the relative interests of various States in a particular controversy. See ante, at 308, n. 10 (plurality opinion).