Shady Grove Orthopedic Associates, P. A. v. Allstate Ins. Co. , 559 U.S. 393 ( 2010 )


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

Document Info

DocketNumber: 08-1008

Citation Numbers: 559 U.S. 393, 130 S. Ct. 1431, 176 L. Ed. 2d 311, 2010 U.S. LEXIS 2929

Filed Date: 3/31/2010

Precedential Status: Precedential

Modified Date: 3/12/2018

Authorities (47)

Beard v. Kindler , 558 U.S. 53 ( 2009 )

Shady Grove Orthopedic Associates v. Allstate Ins. Co. , 549 F.3d 137 ( 2008 )

United States v. Detroit Timber & Lumber Co. , 200 U.S. 321 ( 1906 )

American Banana Co. v. United Fruit Co. , 213 U.S. 347 ( 1909 )

Erie R. Co. v. Tompkins , 304 U.S. 64 ( 1938 )

Sibbach v. Wilson & Co. , 312 U.S. 1 ( 1941 )

Klaxon Co. v. Stentor Elec. Mfg. Co. , 313 U.S. 487 ( 1941 )

Palmer v. Hoffman , 318 U.S. 109 ( 1943 )

Mississippi Publishing Corp. v. Murphree , 326 U.S. 438 ( 1946 )

Angel v. Bullington , 330 U.S. 183 ( 1947 )

Ragan v. Merchants Transfer & Warehouse Co. , 337 U.S. 530 ( 1949 )

Woods v. Interstate Realty Co. , 337 U.S. 535 ( 1949 )

Cohen v. Beneficial Industrial Loan Corp. , 337 U.S. 541 ( 1949 )

Byrd v. Blue Ridge Rural Elec. Cooperative, Inc. , 356 U.S. 525 ( 1958 )

Flora v. United States , 362 U.S. 145 ( 1960 )

Hanna v. Plumer , 380 U.S. 460 ( 1965 )

Coopers & Lybrand v. Livesay , 437 U.S. 463 ( 1978 )

Califano v. Yamasaki , 442 U.S. 682 ( 1979 )

Walker v. Armco Steel Corp. , 446 U.S. 740 ( 1980 )

Burlington Northern R. Co. v. Woods , 480 U.S. 1 ( 1987 )

View All Authorities »

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Sawyer v. Atlas Heating and Sheet Metal Works , 642 F.3d 560 ( 2011 )

All v. All , 645 F.3d 329 ( 2011 )

James River Ins. Co. v. Rapid Funding, LLC , 658 F.3d 1207 ( 2011 )

Patricia Mitchell-Tracey v. United General Title Insurance ( 2011 )

James River Ins. Co. v. Rapid Funding, LLC , 658 F.3d 1207 ( 2011 )

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