HANNA v. PLUMER(1965)
In a civil action in a federal court where jurisdiction is based upon diversity of citizenship, service of process shall be made in the manner set forth in Federal Rule of Civil Procedure 4 (d) (1) rather than in the manner prescribed by state law.
Albert P. Zabin argued the cause for petitioner, pro hac vice, by special leave of Court. With him on the brief was George Welch.
James J. Fitzpatrick argued the cause for respondent. On the brief were Alfred E. LoPresti and James T. Connolly. [380 U.S. 460, 461]
MR. CHIEF JUSTICE WARREN delivered the opinion of the Court.
The question to be decided is whether, in a civil action where the jurisdiction of the United States district court is based upon diversity of citizenship between the parties, service of process shall be made in the manner prescribed by state law or that set forth in Rule 4 (d) (1) of the Federal Rules of Civil Procedure.
On February 6, 1963, petitioner, a citizen of Ohio, filed her complaint in the District Court for the District of Massachusetts, claiming damages in excess of $10,000 for personal injuries resulting from an automobile accident in South Carolina, allegedly caused by the negligence of one Louise Plumer Osgood, a Massachusetts citizen deceased at the time of the filing of the complaint. Respondent, Mrs. Osgood's executor and also a Massachusetts citizen, was named as defendant. On February 8, service was made by leaving copies of the summons and the complaint with respondent's wife at his residence, concededly in compliance with Rule 4 (d) (1), which provides:
We conclude that the adoption of Rule 4 (d) (1), designed to control service of process in diversity actions, 3 [380 U.S. 460, 464] neither exceeded the congressional mandate embodied in the Rules Enabling Act nor transgressed constitutional bounds, and that the Rule is therefore the standard against which the District Court should have measured the adequacy of the service. Accordingly, we reverse the decision of the Court of Appeals.
The Rules Enabling Act, 28 U.S.C. 2072 (1958 ed.), provides, in pertinent part:
In the first place, it is doubtful that, even if there were no Federal Rule making it clear that in-hand service is not required in diversity actions, the Erie rule would have obligated the District Court to follow the Massachusetts procedure. "Outcome-determination" analysis was never [380 U.S. 460, 467] intended to serve as a talisman. Byrd v. Blue Ridge Cooperative, 356 U.S. 525, 537 . Indeed, the message of York itself is that choices between state and federal law are to be made not by application of any automatic, "litmus paper" criterion, but rather by reference to the policies underlying the Erie rule. Guaranty Trust Co. v. York, supra, at 108-112. 6
The Erie rule is rooted in part in a realization that it would be unfair for the character or result of a litigation materially to differ because the suit had been brought in a federal court.
The difference between the conclusion that the Massachusetts rule is applicable, and the conclusion that it is not, is of course at this point "outcome-determinative" in the sense that if we hold the state rule to apply, respondent prevails, whereas if we hold that Rule 4 (d) (1) governs, the litigation will continue. But in this sense every procedural variation is "outcome-determinative." For example, having brought suit in a federal court, a plaintiff cannot then insist on the right to [380 U.S. 460, 469] file subsequent pleadings in accord with the time limits applicable in the state courts, even though enforcement of the federal timetable will, if he continues to insist that he must meet only the state time limit, result in determination of the controversy against him. So it is here. Though choice of the federal or state rule will at this point have a marked effect upon the outcome of the litigation, the difference between the two rules would be of scant, if any, relevance to the choice of a forum. Petitioner, in choosing her forum, was not presented with a situation where application of the state rule would wholly bar recovery; 10 rather, adherence to the state rule would have resulted only in altering the way in which process was served. 11 Moreover, it is difficult to argue that permitting service of defendant's wife to take the place of in-hand service of defendant himself alters the mode of enforcement of state-created rights in a fashion sufficiently "substantial" to raise the sort of equal protection problems to which the Erie opinion alluded.
There is, however, a more fundamental flaw in respondent's syllogism: the incorrect assumption that the rule of Erie R. Co. v. Tompkins constitutes the appropriate test [380 U.S. 460, 470] of the validity and therefore the applicability of a Federal Rule of Civil Procedure. The Erie rule has never been invoked to void a Federal Rule. It is true that there have been cases where this Court has held applicable a state rule in the face of an argument that the situation was governed by one of the Federal Rules. But the holding of each such case was not that Erie commanded displacement of a Federal Rule by an inconsistent state rule, but rather that the scope of the Federal Rule was not as broad as the losing party urged, and therefore, there being no Federal Rule which covered the point in dispute, Erie commanded the enforcement of state law.
Nor has the development of two separate lines of cases been inadvertent. The line between "substance" and "procedure" shifts as the legal context changes. "Each implies different variables depending upon the particular problem for which it is used." Guaranty Trust Co. v. York, supra, at 108; Cook, The Logical and Legal Bases of the Conflict of Laws, pp. 154-183 (1942). It is true that both the Enabling Act and the Erie rule say, roughly, that federal courts are to apply state "substantive" law and federal "procedural" law, but from that it need not follow that the tests are identical. For they were designed to control very different sorts of decisions. When a situation is covered by one of the Federal Rules, the question facing the court is a far cry from the typical, relatively unguided Erie choice: the court has been instructed to apply the Federal Rule, and can refuse to do so only if the Advisory Committee, this Court, and Congress erred in their prima facie judgment that the Rule in question transgresses neither the terms of the Enabling Act nor constitutional restrictions. 13
We are reminded by the Erie opinion 14 that neither Congress nor the federal courts can, under the guise of formulating rules of decision for federal courts, fashion rules which are not supported by a grant of federal authority contained in Article I or some other section of the Constitution; in such areas state law must govern [380 U.S. 460, 472] because there can be no other law. But the opinion in Erie, which involved no Federal Rule and dealt with a question which was "substantive" in every traditional sense (whether the railroad owed a duty of care to Tompkins as a trespasser or a licensee), surely neither said nor implied that measures like Rule 4 (d) (1) are unconstitutional. For the constitutional provision for a federal court system (augmented by the Necessary and Proper Clause) carries with it congressional power to make rules governing the practice and pleading in those courts, which in turn includes a power to regulate matters which, though falling within the uncertain area between substance and procedure, are rationally capable of classification as either. Cf. M`Culloch v. Maryland, 4 Wheat. 316, 421. Neither York nor the cases following it ever suggested that the rule there laid down for coping with situations where no Federal Rule applies is coextensive with the limitation on Congress to which Erie had adverted. Although this Court has never before been confronted with a case where the applicable Federal Rule is in direct collision with the law of the relevant State, 15 courts of appeals faced with such clashes have rightly discerned the implications of our decisions.
[ Footnote 2 ] There are a number of state service requirements which would not necessarily be satisfied by compliance with Rule 4 (d) (1). See, e. g., Cal. Civ. Proc. Code 411 8; Idaho Code Ann. 5-507 7 (1948); Ill. Rev. Stat., c. 110, 13.2 (1963); Ky. Rev. Stat., Rules Civ. Proc., Rule 4.04 (1962); Md. Ann. Code, Rules Proc., Rule 104 b (1963); Mich. Rev. Jud. Act 600.1912 (1961); N.C. Gen. Stat. 1-94 (1953); S. D. Code 33.0807 (8) (Supp. 1960); Tenn. Code Ann. 20-214 (1955).
[ Footnote 3 ] "These rules govern the procedure in the United States district courts in all suits of a civil nature whether cognizable as cases at law or in equity, with the exceptions stated in Rule 81. . . ." Fed. Rules Civ. Proc. 1. This case does not come within any of the exceptions noted in Rule 81.
[ Footnote 4 ] See also Schlagenhauf v. Holder, 379 U.S. 104, 112 -114.
[ Footnote 5 ] See also Ragan v. Merchants Transfer Co., supra; Woods v. Interstate Realty Co., 337 U.S. 535 ; Bernhardt v. Polygraphic Co., 350 U.S. 198, 203 -204, 207-208; cf. Byrd v. Blue Ridge Cooperative, 356 U.S. 525 .
[ Footnote 6 ] See Iovino v. Waterson, 274 F.2d 41, 46-47 (C. A. 2d Cir. 1959), cert. denied sub nom. Carlin v. Iovino, 362 U.S. 949 .
[ Footnote 7 ] See also Klaxon Co. v. Stentor Co., 313 U.S. 487, 496 ; Woods v. Interstate Realty Co., supra, note 5, at 538.
[ Footnote 8 ] Cf. Black & White Taxicab Co. v. Brown & Yellow Taxicab Co., 276 U.S. 518 .
[ Footnote 9 ] The Court of Appeals seemed to frame the inquiry in terms of how "important" 9 is to the State. In support of its suggestion that 9 serves some interest the State regards as vital to its citizens, the court noted that something like 9 has been on the books in Massachusetts a long time, that 9 has been amended a number of times, and that 9 is designed to make sure that executors receive actual notice. See note 1, supra. The apparent lack of relation among these three observations is not surprising, because it is not clear to what sort of question the Court of Appeals was addressing itself. One cannot meaningfully ask how important something is without first asking "important for what purpose?" Erie and its progeny make clear that when a federal court sitting in a diversity case is faced with a question of whether or not to apply state law, the importance of a state rule is indeed relevant, but only in the context of asking whether application of the rule would make so important a difference to the character or result of the litigation that failure to enforce it would unfairly discriminate against citizens of the forum State, or whether application of the rule would have so important an effect upon the fortunes of one or both of the litigants that failure to enforce it would be likely to cause a plaintiff to choose the federal court.
[ Footnote 10 ] See Guaranty Trust Co. v. York, supra, at 108-109; Ragan v. Merchants Transfer Co., supra, at 532; Woods v. Interstate Realty Co., supra, note 5, at 538. Similarly, a federal court's refusal to enforce the New Jersey rule involved in Cohen v. Beneficial Loan Corp., 337 U.S. 541 , requiring the posting of security by plaintiffs in stockholders' derivative actions, might well impel a stockholder to choose to bring suit in the federal, rather than the state, court.
[ Footnote 11 ] Cf. Monarch Insurance Co. of Ohio v. Spach, 281 F.2d 401, 412 (C. A. 5th Cir. 1960). We cannot seriously entertain the thought that one suing an estate would be led to choose the federal court because of a belief that adherence to Rule 4 (d) (1) is less likely to give the executor actual notice than 9, and therefore more likely to produce a default judgment. Rule 4 (d) (1) is well designed to give actual notice, as it did in this case. See note 1, supra.
[ Footnote 12 ] To the same effect, see Ragan v. Merchants Transfer Co., supra; Cohen v. Beneficial Loan Corp., supra, note 10, at 556; id., at 557 (DOUGLAS, J., dissenting); cf. Bernhardt v. Polygraphic Co., supra, note 5, at 201-202; see generally Iovino v. Waterson, supra, note 6, at 47-48.
[ Footnote 13 ] Sibbach v. Wilson & Co., supra, at 13-15; see Appointment of Committee to Draft Unified System of Equity and Law Rules, 295 U.S. 774 ; Orders re Rules of Procedure, 302 U.S. 783 ; Letter of Submittal, 308 U.S. 649 ; 1A Moore, Federal Practice § 0.501 2., at 5027-5028 (2d ed. 1961).
[ Footnote 14 ] Erie R. Co v. Tompkins, supra, at 77-79; cf. Bernhardt v. Polygraphic Co., supra, note 5, at 202; Sibbach v. Wilson & Co., supra, at 10; Guaranty Trust Co. v. York, supra, at 105.
[ Footnote 15 ] In Sibbach v. Wilson & Co., supra, the law of the forum State (Illinois) forbade the sort of order authorized by Rule 35. However, Sibbach was decided before Klaxon Co. v. Stentor Co., supra, note 7, and the Sibbach opinion makes clear that the Court was proceeding on the assumption that if the law of any State was relevant, it was the law of the State where the tort occurred (Indiana), which, like Rule 35, made provision for such orders. 312 U.S., at 6 -7, 10-11.
[ Footnote 16 ] To the same effect, see D'Onofrio Construction Co. v. Recon Co., 255 F.2d 904, 909-910 (C. A. 1st Cir. 1958).
[ Footnote 17 ] Mississippi Pub. Corp. v. Murphree, supra, at 445-446; Iovino v. Waterson, supra, note 6, at 46.
MR. JUSTICE HARLAN, concurring.
It is unquestionably true that up to now Erie and the cases following it have not succeeded in articulating a workable doctrine governing choice of law in diversity actions. I respect the Court's effort to clarify the situation in today's opinion. However, in doing so I think it has misconceived the constitutional premises of Erie and has failed to deal adequately with those past decisions upon which the courts below relied.
Erie was something more than an opinion which worried about "forum-shopping and avoidance of inequitable administration of the laws," ante, p. 468, although to be sure these were important elements of the decision. I have always regarded that decision as one of the modern cornerstones of our federalism, expressing policies that profoundly touch the allocation of judicial power between the state and federal systems. Erie recognized that there should not be two conflicting systems of law controlling the primary activity of citizens, for such alternative governing authority must necessarily give rise to a debilitating uncertainty in the planning of everyday affairs. 1 And it recognized that the scheme of our Constitution envisions an allocation of law-making functions between state and federal legislative processes which is undercut if the federal judiciary can make substantive law affecting [380 U.S. 460, 475] state affairs beyond the bounds of congressional legislative powers in this regard. Thus, in diversity cases Erie commands that it be the state law governing primary private activity which prevails.
The shorthand formulations which have appeared in some past decisions are prone to carry untoward results that frequently arise from oversimplification. The Court is quite right in stating that the "outcome-determinative" test of Guaranty Trust Co. v. York, 326 U.S. 99 , if taken literally, proves too much, for any rule, no matter how clearly "procedural," can affect the outcome of litigation if it is not obeyed. In turning from the "outcome" test of York back to the unadorned forum-shopping rationale of Erie, however, the Court falls prey to like over-simplification, for a simple forum-shopping rule also proves too much; litigants often choose a federal forum merely to obtain what they consider the advantages of the Federal Rules of Civil Procedure or to try their cases before a supposedly more favorable judge. To my mind the proper line of approach in determining whether to apply a state or a federal rule, whether "substantive" or "procedural," is to stay close to basic principles by inquiring if the choice of rule would substantially affect those primary decisions respecting human conduct which our constitutional system leaves to state regulation. 2 If so, Erie and the Constitution require that the state rule prevail, even in the face of a conflicting federal rule.
The Court weakens, if indeed it does not submerge, this basic principle by finding, in effect, a grant of substantive legislative power in the constitutional provision for a federal [380 U.S. 460, 476] court system (compare Swift v. Tyson, 16 Pet. 1), and through it, setting up the Federal Rules as a body of law inviolate.
The courts below relied upon this Court's decisions in Ragan v. Merchants Transfer Co., 337 U.S. 530 , and Cohen v. Beneficial Loan Corp., 337 U.S. 541 . Those cases deserve more attention than this Court has given them, particularly Ragan which, if still good law, would in my opinion call for affirmance of the result reached by the Court of Appeals. Further, a discussion of these two cases will serve to illuminate the "diversity" thesis I am advocating.
In Ragan a Kansas statute of limitations provided that an action was deemed commenced when service was made on the defendant. Despite Federal Rule 3 which provides that an action commences with the filing of the complaint, [380 U.S. 460, 477] the Court held that for purposes of the Kansas statute of limitations a diversity tort action commenced only when service was made upon the defendant. The effect of this holding was that although the plaintiff had filed his federal complaint within the state period of limitations, his action was barred because the federal marshal did not serve a summons on the defendant until after the limitations period had run. I think that the decision was wrong. At most, application of the Federal Rule would have meant that potential Kansas tort defendants would have to defer for a few days the satisfaction of knowing that they had not been sued within the limitations period. The choice of the Federal Rule would have had no effect on the primary stages of private activity from which torts arise, and only the most minimal effect on behavior following the commission of the tort. In such circumstances the interest of the federal system in proceeding under its own rules should have prevailed.
Cohen v. Beneficial Loan Corp. held that a federal diversity court must apply a state statute requiring a small stockholder in a stockholder derivative suit to post a bond securing payment of defense costs as a condition to prosecuting an action. Such a statute is not "outcome determinative"; the plaintiff can win with or without it. The Court now rationalizes the case on the ground that the statute might affect the plaintiff's choice of forum (ante, p. 469, n. 10), but as has been pointed out, a simple forum-shopping test proves too much. The proper view of Cohen is, in my opinion, that the statute was meant to inhibit small stockholders from instituting "strike suits," and thus it was designed and could be expected to have a substantial impact on private primary activity. Anyone who was at the trial bar during the period when Cohen arose can appreciate the strong state policy reflected in the statute. I think it wholly legitimate to view Federal Rule 23 as not purporting to deal [380 U.S. 460, 478] with the problem. But even had the Federal Rules purported to do so, and in so doing provided a substantially less effective deterrent to strike suits, I think the state rule should still have prevailed. That is where I believe the Court's view differs from mine; for the Court attributes such overriding force to the Federal Rules that it is hard to think of a case where a conflicting state rule would be allowed to operate, even though the state rule reflected policy considerations which, under Erie, would lie within the realm of state legislative authority.
It remains to apply what has been said to the present case. The Massachusetts rule provides that an executor need not answer suits unless in-hand service was made upon him or notice of the action was filed in the proper registry of probate within one year of his giving bond. The evident intent of this statute is to permit an executor to distribute the estate which he is administering without fear that further liabilities may be outstanding for which he could be held personally liable. If the Federal District Court in Massachusetts applies Rule 4 (d) (1) of the Federal Rules of Civil Procedure instead of the Massachusetts service rule, what effect would that have on the speed and assurance with which estates are distributed? As I see it, the effect would not be substantial. It would mean simply that an executor would have to check at his own house or the federal courthouse as well as the registry of probate before he could distribute the estate with impunity. As this does not seem enough to give rise to any real impingement on the vitality of the state policy which the Massachusetts rule is intended to serve, I concur in the judgment of the Court.
[ Footnote 1 ] Since the rules involved in the present case are parallel rather than conflicting, this first rationale does not come into play here.
[ Footnote 2 ] See Hart and Wechsler, The Federal Courts and the Federal System 678. Byrd v. Blue Ridge Coop., Inc., 356 U.S. 525, 536 -540, indicated that state procedures would apply if the State had manifested a particularly strong interest in their employment. Compare Dice v. Akron, C. & Y. R. Co., 342 U.S. 359 . However, this approach may not be of constitutional proportions. [380 U.S. 460, 479]