Lead Opinion
OPINION OF THE COURT
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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.
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I
The petitioner’s complaint alleged the following: Shady Grove Orthopedic Associates, P. A., provided medical care to Sonia E. Galvez for injuries she suffered in an automobile accident. As partial payment for that care, Galvez assigned to Shady Grove her rights to insurance benefits under a policy issued in New York by Allstate Insurance Co. Shady Grove tendered a claim for the assigned benefits to Allstate, which under New York law had 30 days to pay the claim or deny it. See N. Y. Ins. Law Ann. § 5106(a) (West 2009). Allstate apparently paid, but not on time, and it refused to pay the statutory interest that accrued on the overdue benefits (at two percent per month), see ibid.
Shady Grove filed this diversity suit in the Eastern District of New York to recover the unpaid statutory interest. Alleging that Allstate routinely refuses to pay interest on overdue benefits, Shady Grove 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.
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The Second Circuit affirmed.
We granted certiorari.
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,
A
The question in dispute is whether Shady Grove’s suit may proceed as a class action. Rule 23 provides an answer. It states that “[a] class action may be maintained” if two conditions are met: The suit must satisfy the criteria set forth in subdivision (a) (i.e., numerosity, commonality, typicality, and adequacy of representation), and it also must fit into one of the three categories described in subdivision (b). Fed. Rule Civ. Proc. 23(b). By its terms this creates a categorical rule entitling a plaintiff whose suit meets the specified criteria to pursue his claim as a class action. (The Federal Rules regularly use “may” to confer categorical permission, see, e.g., Fed. Rules Civ. Proc. 8(d)(2)—(3), 14(a)(1), 18(a)-(b), 20(a)(1)-(2), 27(a)(1), 30(a)(1), as do federal statutes that establish
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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; § 901(b), on the other hand, addresses an antecedent question: whether the particular type of claim
We disagree. To begin with, the line between eligibility and certifiability is entirely artificial. Both are preconditions for maintaining a class action. Allstate suggests that eligibility must depend on the “particular cause of action” asserted, instead of some other attribute of the suit, id., at 12. But that is not so. Congress could, for example, provide that only claims involving more than a certain number of plaintiffs are “eligible” for class treatment in federal court. In other words, relabeling Rule 23(a)’s prerequisites “eligibility criteria” would obviate Allstate’s objection—a sure sign that its eligibility-certifiability distinction is made-to-order.
There is no reason, in any event, to read Rule 23 as addressing only whether claims made eligible for class treatment by some other law should be certified as class actions. Allstate asserts that Rule 23 neither explicitly nor implicitly empowers a federal court “to certify a class in each and every case” where the Rule’s criteria are met. Id., at 13-14. But that is exactly what Rule 23 does: It says that if the
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prescribed preconditions are satisfied “[a] class action may be maintained” (emphasis added)—not “a class action may be permitted.” Courts do not maintain actions; litigants do. The discretion suggested by Rule 23’s “may” is discretion residing in the plaintiff: He may bring his claim in a class action if he wishes. And like the rest of the Federal Rules of Civil Procedure, Rule 23 automatically applies “in all civil actions and proceedings in the United States district courts,” Fed. Rule Civ. Proc. 1. See Califano v. Yamasaki,
Allstate points out that Congress has carved out some federal claims from Rule 23’s reach, see, e.g., 8 U.S.C. § 1252(e)(1)(B)—which shows, Allstate contends, that Rule 23 does not authorize class actions for all claims, but rather leaves room for laws like § 901(b). But Congress, unlike New York, has ultimate authority over the Federal Rules of Civil Procedure; it can create exceptions to an individual rule as it sees fit—either by directly amending the rule or by enacting a separate statute overriding it in certain instances. Cf. Henderson v. United States,
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, according to Allstate, that § 901(b) concerns a separate subject. Perhaps it does concern a subject separate from the subject of § 901(a). But the question before us is whether it concerns a subject separate from the subject of Rule 23—and for purposes of answering
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that question the way New York has structured its statute is immate
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 443-451,
We need not decide whether a state law that limits the remedies available in an existing class action would conflict with Rule 23; that is not what § 901(b) does. By its terms, the provision precludes a plaintiff from “main-tainting]” 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.
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a court bound by § 901(b) could not certify a class action seeking both statutory penalties and other remedies even if it announces in advance that it will refuse to award the penalties in the event the plaintiffs prevail; to do so would violate the statute’s clear prohibition on “maintain[ing]” such suits as class actions.
The dissent asserts that a plaintiff can avoid § 901(b)’s barrier by omitting from his complaint (or removing) a request for statutory penalties. See post, at 449-450,
The dissent all but admits that the literal terms of § 901(b) address the same subject as Rule 23—i.e., whether a class action may be maintained—but insists the provision’s purpose is to restrict only remedies. See post, at 447-448,
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dissent reaches this conclusion on the basis of (1) constituent concern recorded in the law’s bill jacket; (2) a commentary suggesting that the legislature “apparently fear[edj” that combining class actions and statutory penalties “could result in annihilating punishment of the defendant,” V. Alexander, Practice Commentaries, C901:11, reprinted in 7B McKinney’s Consolidated Laws of New York Ann., p. 104 (2006) (internal quotation marks omitted); (3) a remark by the Governor in his signing statement that § 901(b) “ ‘provides a controlled remedy,’ ” post, at 444,
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 plaintiffs power to maintain a class action. The manner in which the law “could have been written,” post, at 457,
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for state prerogatives is frustrated rather than fur
The dissent’s approach of determining whether state and federal rules conflict based on the subjective intentions of the state legislature is an enterprise destined to produce “confusion worse confounded,” Sibbach v. Wilson & Co.,
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for avoiding federal preemption is ultimately a federal question. Predictably, federal judges would be condemned to poring through state legislative history— which may be less easily obtained, less thorough, and less familiar than its federal counterpart, see R. Mersky & D. Dunn, Fundamentals of Legal Research 233 (8th ed. 2002); Torres & Windsor, State Legislative Histories: A Select, Annotated Bibliography, 85 L. Lib. J. 545, 547 (1993).
But while the dissent does indeed artificially narrow the scope of § 901(b) by finding that it pursues only substantive policies, that is not the central difficulty of the dissent’s position. The central difficulty is that even artificial narrowing cannot render § 901(b) compatible with Rule 23. Whatever the policies they pursue, they flatly contradict each other. Allstate asserts (and the dissent implies, see post, at 438, 446,
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§ 2072(b) and another that would not—we would agree. See Ortiz v. Fibreboard Corp.,
B
Erie involved the constitutional power of federal courts to supplant state law with judge-made rules. In that context, it made no difference whether the rule was technically one of substance or procedure; the touchstone was whether it “significantly affect[s] the result of a litigation.” Guaranty Trust Co. v. York,
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Act, Congress authorized this Court to promulgate rules of procedure subject to its review, 28 U.S.C. § 2072(a), but with the limitation that those rules “shall not abridge, enlarge or modify any substantive right,” § 2072(b).
We have long held that this limitation means that the Rule must “really regulat[e] procedure,—the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for disregard or infraction of them,” Sibbach,
Applying that test, we have rejected every statutory challenge to a Federal Rule that has come before us. We have found to be in compliance with § 2072(b) Rules prescribing methods for serving process, see id., at 445-446,
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themselves, the available remedies, or the rules of decision by which the court adjudicated either.
Applying that criterion, we think it obvious that Rules allowing multiple claims (and claims by or against multiple parties) to be litigated together are also valid. See, e.g., Fed. Rules Civ. Proc. 18 (joinder of claims), 20 (joinder of parties), 42(a) (consolidation of actions). Such Rules neither change plaintiffs’ separate entitlements to relief nor abridge defendants’ rights; they alter only how the claims are processed. For the same reason, Rule 23—at least insofar as it allows willing plaintiffs to join their separate claims against the same defendants in a class action—falls within § 2072(b)’s authorization. A class action, no less than traditional joinder (of which it is a species), merely enables a federal court to adjudicate claims of multiple parties at once, instead of in separate suits. And like traditional joinder, it leaves the parties’ legal rights and duties intact and the rules of decision unchanged.
Allstate contends that the authorization of class actions is not substantively neutral: Allowing Shady Grove to sue on behalf of a class “transform[s] [the] dispute over a five hundred dollar penalty into a dispute over a five million dollar penalty.” Brief for Respondent 1. Allstate’s aggregate liability, however, does not depend on whether the suit proceeds as a class action. Each of the 1,000-plus members of the putative class could (as Allstate acknowledges) bring a freestanding suit asserting his individual claim. It is undoubtedly true that some plaintiffs who would not bring individual suits for the relatively small sums involved will choose to join a class action. That has no bearing, however, on Allstate’s or the plaintiffs’ legal rights. The likelihood
Allstate argues that Rule 23 violates § 2072(b) because the state law it displaces, § 901(b), creates a right that the Federal
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Rule abridges— namely, a “substantive right . . . not to be subjected to aggregated class-action liability” in a single suit. Brief for Respondent 31. To begin with, we doubt that that is so. Nothing in the text of § 901(b) (which is to be found in New York’s procedural code) confines it to claims under New York law; and of course New York has no power to alter substantive rights and duties created by other sovereigns. As we have said, the consequence of excluding certain class actions may be to cap the damages a defendant can face in a single suit, but the law itself alters only procedure. In that respect, § 901(b) is no different from a state law forbidding simple joinder. As a fallback argument, Allstate argues that even if § 901(b) is a procedural provision, it was enacted “for substantive reasons,” id., at 24 (emphasis added). Its end was not to improve “the conduct of the litigation process itself’ but to alter “the outcome of that process.” Id., at 26.
The fundamental difficulty with both these arguments is that the substantive nature of New York’s law, or its substantive purpose, makes no difference. A Federal Rule of Procedure is not valid in some jurisdictions and invalid in others—or valid in some cases and invalid in others—depending upon whether its effect is to frustrate a state substantive law (or a state procedural law enacted for substantive purposes). That could not be clearer in Sibbach:
“The petitioner says the phrase [‘substantive rights’ in the Rules Enabling Act] connotes more; that by its use Congress intended that in regulating procedure this Court should not deal with important and substantial rights theretofore recognized. Recognized where and by whom? The state courts are divided as to the power in the absence of statute to order a physical examination. In a number such an order is authorized by statute or rule.
“The asserted right, moreover, is no more important than many others enjoyed by litigants in District Courts sitting in the several states, before the Federal Rules
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of Civil Procedure altered and abolished old rights or privileges and created new ones in connection with the conduct of litigation. ... If we were to adopt the suggested criterion of the importance of the alleged right we should invite endless litigation and confusion worse confounded. The test must be whether a rule really regulates procedure . ...”312 U.S., at 13-14 ,61 S. Ct. 422 ,85 L. Ed. 479 (footnote omitted).
Hanna unmistakably expressed the same understanding that compliance of a Federal Rule with the Enabling Act is to be assessed by consulting the Rule itself, and not its effects in individual applications:
“[T]he court has been instructed to apply the Federal Rule, and can refuse to do so only if the Advisory Committee, this Court, and Congress erred in their prima facie judgment that the Rule in question transgresses neither the terms of the Enabling Act nor constitutional*325 restrictions.”380 U.S., at 471 ,85 S. Ct. 1136 ,14 L. Ed. 2d 8 .
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,
C
A few words in response to the concurrence. We understand it to accept the framework we apply—which requires first, determining whether the federal and state rules can be reconciled (because they answer different questions), and second, if they cannot, determining whether the Federal Rule runs afoul of § 2072(b). Post, at 421-422,
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concurring in part and concurring in judgment). The concurrence agrees with us that Rule 23 and § 901(b) conflict, post, at 429-431,
The concurrence would decide this case on the basis, not that Rule 23 is procedural, but that the state law it displaces is procedural, in the sense that it does not “function as a part of the State’s definition of substantive rights and remedies.” Post, at 416-417,
This analysis squarely conflicts with Sibbach, which established the rule we apply. The concurrence contends that Sibbach did not rule out its approach, but that is not so. Recognizing the impracticability of a test that turns on the idiosyncrasies of state law, Sibbach adopted and applied a rule with a single criterion: whether the Federal Rule “really regulates procedure.”
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concurrence’s approach would have yielded
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 prohibiting the Federal Rules from “abridging], enlarging], or modifying] any substantive right,” § 2072(b). See post, at 424-425,
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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
Sibbach has been settled law, however, for nearly seven decades.
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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,
The concurrence also contends that applying Sibbach and assessing whether a Federal Rule regulates substance or procedure is not always easy. See post, at 426, n. 10,
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Sibbach was decided). But as the concurrence acknowledges, post, at 426,
D
We must acknowledge the reality that keeping the federal-court door open to class actions that cannot proceed in state court will produce forum shopping. That is unacceptable
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when it comes as the consequence of judge-made rules created to fill supposed “gaps” in positive federal law. See Hanna,
The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings.
It is so ordered.
Notes
. New York Civ. Prac. Law Ann. § 901 (West 2006) provides:
“(a) One or more members of a class may sue or be sued as representative parties on behalf of all if:
“1. the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable;
“2. there are questions of law or fact common to the class which predominate over any questions affecting only individual members;
“3. the claims or defenses of the representative parties are typical of the claims or defenses of the class;
“4. the representative parties will fairly and adequately protect the interests of the class; and
“5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy.
“(b) Unless a statute creating or imposing a penalty, or a minimum measure of recovery specifically authorizes the recovery thereof in a class action, an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action.’’
. Rule 23(a) provides:
“(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:
“(1) the class is so numerous that joinder of all members is impracticable;
“(2) there are questions of law or fact common to the class;
“(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
“(4) the representative parties will fairly and adequately protect the interests of the class.’’ Subsection (b) says that “[a] class action may be maintained if Rule 23(a) is satisfied and if’ the suit falls into one of three described categories (irrelevant for present purposes).
. 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.,
. Contrary to the dissent’s implication, post, at 448,
. But see, e.g., Asher v. Abbott Labs., 290 App. Div. 2d 208,
. Our decision in Walker v. Arinco Steel Corp.,
. 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 442,
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
. The cases chronicled by the dissent, see post, at 439-443,
. The concurrence claims that in Sibbach “[t]he Court. . . had no occasion to consider whether the particular application of the Federal Rules in question would offend the Enabling Act.” Post, at 427,
The concurrence responds that “the specific question of ‘the obligation of federal courts to apply the substantive law of a state’” was not before the Court, post, at 427,
. 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 428, n. 13,
. The concurrence’s approach, however, is itself unfaithful to the statute’s terms. Section 2072(b) bans abridgment 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 433,
. The concurrence implies that Sibbach has slipped into desuetude, apparently for lack of sufficient citations. See post, at 428-429, n. 14,
In contrast, Hanna's obscure obiter dictum that a court “need not wholly blind itself’ to a Federal Rule’s effect on a case’s outcome,
. The concurrence is correct, post, at 425, n. 9,
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 426, n. 10,
. 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 426,
. The concurrence insists that the task will be easier if courts can “conside[r] the nature and functions of the state law,” post, at 426, n. 10,
Concurrence Opinion
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
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as a part of the State’s definition of substantive rights and remedies.
I
It is a long-recognized principle that federal courts sitting in diversity “apply state substantive law and federal procedural law.” Hanna v. Plumer,
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.,
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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
Although the Enabling Act and the Rules of Decision Act “say, roughly, that federal courts are to apply state ‘substantive’ law and federal ‘procedural’ law,” the inquiries are not the same. Ibid..; see also id., at 469-470,
Congress has thus struck a balance: “ [Housekeeping rules for federal courts” will generally apply in diversity cases, notwithstanding that some federal rules “will inevitably differ” from state rules. Hanna,
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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,
Applying this balance, therefore, requires careful interpretation of the state and federal provisions at issue. “The line between procedural and substantive law is hazy,” Erie R. Co. v. Tompkins,
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sense of the term,” may exist “to influence substantive outcomes,” S. A. Healy Co. v. Milwaukee Metropolitan Sewerage Dist.,
In our federalist system, Congress has not mandated that federal courts dictate to state legislatures the form that their substantive law must take. And were federal courts to ignore those portions of substantive state law that operate as procedural devices, it could in many instances limit the ways that sovereign States may define their rights and remedies. When a State chooses to use a traditionally procedural vehicle as a means of defining the scope of substantive rights or remedies, federal courts must recognize and respect that choice. Cf. Ragan v. Merchants Transfer & Warehouse Co.,
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by local law, the measure of it is to be found only in local law. . . . Where local law qualifies or abridges it, the federal court must follow suit”).
II
When both a federal rule and a state law appear to govern a question before a federal court sitting in diversity, our precedents have set out a two-step framework for federal courts to negotiate this thorny area. At both steps of the inquiry, there is a critical question about what the state law and the federal rule mean.
The court must first determine whether the scope of the federal rule is “ ‘sufficiently broad’ ” to “ ‘control the issue’ ” before the court, “thereby leaving no room for the operation” of
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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,
Thus, the second step of the inquiry may well bleed back into the first. When a federal rule appears to abridge, enlarge,
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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.,
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of cases. This application of the Enabling Act shows “sensitivity to important state interests,” post, at 442,
Justice Scalia believes that the sole Enabling Act question is whether the federal rule “really regulates procedure,” ante, at 407, 410, 411, 414, n. 13,
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Congress struck between uniform rules of federal procedure and respect for a State’s construction of its own rights and remedies. It also ignores the separation-of-powers presumption, see Wright § 4509, at 265, and federalism presumption, see Wyeth,
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Although the plurality appears to agree with much of my interpretation of § 2072, see ante, at 412-413, 176
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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.”
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Nor, in Sibbach, was any further analysis necessary to the resolution of the case because the matter at issue, requiring medical exams for litigants, did not pertain to “substantive rights” under the Enabling Act. Although most state rules bearing on the litigation process are adopted for some policy reason, few seemingly “procedural” rules define the scope of a substantive right or remedy. The matter at issue in Sibbach reflected competing federal and state judgments about privacy interests. Those privacy concerns may have been weighty and in some sense substantive; but they did not pertain to the scope of any state right or remedy at issue in the litigation. Thus, in response to the petitioner’s argument in Sibbach that “substantive rights” include not only “rights sought to be adjudicated by the litigants” but also “general prin-cipiéis]” or “question[s] of public policy that the legislature is able to pass upon,” id., at 2-3,
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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 447,
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
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should do so. That is the explicit function of Rule 23. Rule 23, therefore, must apply unless its application would abridge, enlarge, or modify New York rights or remedies.
Notwithstanding the plain language of Rule 23, I understand the dissent to find that Rule 23 does not govern the question of class certification in this matter because New York has made a substantive judgment that such a class should not be certified, as a means of proscribing damages. Although, as discussed infra, at 432-435,
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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,
Applying Rule 23 Does Not Violate the Enabling Act
As I have explained, in considering whether to certify a class action such as this one, a federal court must inquire whether doing so would abridge, enlarge, or modify New York’s rights or remedies, and thereby violate the Enabling Act. This inquiry is not always a simple one because “ [i]t is difficult to conceive of any rule of procedure that cannot have
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a significant effect on the outcome of a case,” Wright § 4508, at 232-233, and almost “any rule can be said to have . . . ‘substantive effects,’ affecting society’s distribution of risks and rewards,” Ely 724, n. 170. Faced with a federal rule that dictates an answer to a traditionally procedural question and that displaces a state rule, one can often argue that the state rule was really some part of the State’s definition of its rights or remedies.
In my view, however, the bar for finding an Enabling Act problem is a high one. The mere fact that a state law is designed as a procedural rule suggests it reflects a judgment about how state courts ought to operate and not a judgment about the scope of state-created rights and remedies. And for the purposes of operating a federal court system, there are costs involved in attempting to discover the true nature of a state procedural rule and allowing such a rule to operate alongside a federal rule that appears to govern the same question. The mere possibility that a federal rule would alter a state-created right is not sufficient. There must be little doubt.
The text of CPLR § 901(b) expressly and unambiguously applies not only
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notes, that is not the law that New York adopted.
The legislative history, moreover, does not clearly describe a judgment that § 901(b) would operate as a limitation on New York’s statutory damages. In evaluating that legislative history, it is necessary to distinguish between procedural rules adopted for some policy reason and seemingly procedural rules that are intimately bound up in the scope of a substantive right or remedy. Although almost every rule is adopted for some reason and has some effect on the outcome of litigation, not every state rule “defines the dimensions
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of [a] claim itself,” post, at 447,
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,
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be true because “suits seeking statutory damages are arguably best suited to the class device because individual proof of actual damages is unnecessary.” Post, at 445,
The legislative history of § 901 thus reveals a classically procedural calibration of making it easier to litigate claims in New York courts (under any source of law) only when it is necessary to do so, and not making it too easy when the class tool is not required. This is the same sort of calculation that might go into setting filing fees or deadlines for briefs. There is of course a difference of degree between those examples and class certification, but not a difference of kind; the class vehicle may have a greater practical effect on who brings lawsuits than do low filing fees, but that does not transform it into a damages “proscription,” post, at 447, n. 6, 456,
The difference of degree is relevant to the forum shopping considerations that are part of the Rules of Decision
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But that is not this case. As the Court explained in Hanna, it is an “incorrect assumption that the rule of Erie R. Co. v. Tompkins constitutes the appropriate test of . . . the applicability of a Federal Rule of Civil Procedure.”
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 443, and n. 2, 444, 447, 459,
Accordingly, I concur in part and concur in the judgment.
. See also Gasperini v. Center for Humanities, Inc.,
. The choice in Erie R. Co. v. Tompkins,
. See Chemerinsky § 5.3.5, 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’’).
. Cf. Milam v. State Farm Mat. Auto. Ins. Co.,
. I thus agree with Justice Ginsburg, post, at 438-442,
. See also Ortiz v. Fibreboard Corp.,
. This understanding of the Enabling Act has been the subject of substantial academic criticism, and rightfully so. See, e.g., Wright § 4509, at 264, 269-270, 272; Ely, The Irrepressible Myth of Erie, 87 Harv. L. Rev. 693, 719 (1974) (hereinafter Ely); see also R. Fallon, J. Manning, D. Meltzer, & D. Shapiro, Hart and Wechsler’s The Federal Courts and the Federal System 593, n. 6 (6th ed. 2009) (discussing Ely).
. Justice Scalia concedes as much, see ante, at 412-413,
. 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 407,
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 414, n. 13,
. It will be rare that a federal rule that is facially valid under 28 U.S.C. § 2072 will displace a State’s definition of its own substantive rights. See Wright § 4509, at 272 (observing that “unusual cases occasionally might arise in which . . . because of an unorthodox state rule of law, application of a Civil Rule . . . would intrude upon state substantive rights’’). Justice Scalia’s interpretation, moreover, is not much more determinative than mine. Although it avoids courts’ having to evaluate state law, it tasks them with figuring out whether a federal rule is really “procedural.’’ It is hard to know the answer to that question and especially hard to resolve it without considering the nature and functions of the state law that the federal rule will displace. The plurality’s “ ‘test’ is no test at all—in a sense, it is little more than the statement that a matter is procedural if, by revelation, it is procedural.’’ Id., at 264.
. The petitioner in Sibbach argued only that federal rules could not validly address subjects involving “important questions of policy,” Supp. Brief for Petitioner, O. T. 1940, No. 28, p. 7; see also Reply to Brief for 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
. The plurality defends its view by including a long quote from two paragraphs of Sibbach. Ante, at 409-410,
. Put another way, even if a federal rule in most cases “really regulates procedure,” Sibbach,
. Although this Court’s decision in Hanna cited Sibbach, that is of little significance. Hanna did not hold that any seemingly procedural federal rule will always govern, even when it alters a substantive state right; nor, as in Sibbach, was the argument that I now make before the Court. Indeed, in Hanna we cited Sibbach's statement that the Enabling Act prohibits federal rules that alter the rights to be adjudicated by the litigants,
Justice Scalia notes that in Mississippi Publishing Corp. v. Murphree,
. 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 443, and n. 2, 444, 447, 459,
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
. 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 453-454,
The dissent’s citations, moreover, highlight simply that when interpreting statutes, context matters. Thus, we sometimes presume that laws cover only domestic conduct and sometimes do not, depending upon, inter alia, whether it makes sense in a given situation to assume that “the character of an act as lawful or unlawful must be determined wholly by the law of the [place] where the act is done,’’ American Banana Co. v. United Fruit Co.,
. 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.
. Justice Ginsburg asserts that class certification in this matter would “transform a $500 case into a $5 million award.’’ Post, at 436,
Dissenting Opinion
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 million award, although the State creating the right to recover has proscribed this alchemy. If Shady Grove had filed suit in New York state court, the 2% interest payment authorized by New York Ins. Law Ann. § 5106(a) (West 2009) as a penalty for overdue benefits would, by Shady Grove’s own measure, amount to no more than
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$500. By instead filing in federal court based on the parties’ diverse citizenship and requesting class certification, Shady Grove hopes to recover, for the class, statutory damages of more than $5 million. The New York Legislature has barred this remedy, instructing that, unless specifically permitted, “an action to recover a penalty, or minimum measure of recovery created or imposed by statute may not be maintained as a class action.” N. Y. Civ. Prac. Law Ann. (CPLR) § 901(b) (West 2006). The Court nevertheless holds that Federal Rule of Civil Procedure 23, which prescribes procedures for the conduct of class actions in federal courts, preempts the application of § 901(b) in diversity suits.
The Court reads Rule 23 relentlessly to override New York’s restriction on the availability of statutory damages. Our decisions, however, caution us to ask, before undermining state legislation: Is this conflict really necessary? Cf. Traynor, Is This Con
I
A
“Under the Erie doctrine,” it is long settled, “federal courts sitting in diversity apply state substantive law and federal procedural law.” Gasperini v. Center for Humanities, Inc.,
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The first, the Rules of Decision Act,
The second, the Rules Enabling Act, enacted in 1934, authorizes us to “prescribe general rules of practice and procedure” for the federal courts, but with a crucial restriction: “Such rules shall not abridge, enlarge or modify any substantive right.” 28 U.S.C. § 2072. Pursuant to this statute, we have adopted the Federal Rules of Civil Procedure. In interpreting the scope of the Rules, including, in particular, Rule 23, we have been mindful of the limits on our authority. See, e.g., Ortiz v. Fibreboard Corp.,
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,
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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,
B
In our prior decisions in point, many of them not mentioned in the Court’s opinion, we have avoided immoderate interpretations of the Federal Rules that would trench on state prerogatives without serving any countervailing federal interest. “Application of the Hanna analysis,” we have said, “is premised on a ‘direct collision’ between the Federal Rule and the state law.” Walker v. Armco Steel Corp.,
In pre-Hanna decisions, the Court vigilantly read the Federal Rules to avoid conflict with state laws. In Palmer v. Hoffman,
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Six years later, in Ragan v. Merchants Transfer & Warehouse Co.,
Similarly in Cohen v. Beneficial Industrial Loan Corp.,
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.”
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be interpreted by the courts applying them, and that the process of interpretation can and should reflect an awareness of legitimate state interests.” R. Fallon, J. Manning, D. Meltzer, & D. Shapiro, Hart and Wechsler’s The Federal Courts and the Federal System 593 (6th ed. 2009) (hereinafter Hart & Wechsler).
Following Hanna, we continued to “interpre[t] the federal rules to avoid conflict with important state regulatory policies.” Hart & Wechsler 593. In Walker, the Court took up the question whether Ragan should be overruled; we held, once again, that Federal Rule 3 does not directly conflict with state rules governing the time when an action commences for purposes of tolling a limitations period.
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
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Gasperini,
Most recently, in Semtek, we addressed the claim-preclusive effect of a federal-court judgment dismissing a diversity action on the basis of a California statute of limitations. The case came to us after the same plaintiff renewed the same fray against the same defendant in a Maryland state court. (Plaintiff chose Maryland because that State’s limitations period had not yet run.) We held that Federal Rule 41(b), which provided that an involuntary dismissal “operate [d] as an adjudication on the merits,” did not bar maintenance of the renewed action in Maryland. To hold that Rule 41(b) precluded the Maryland courts from entertaining the case, we said, “would arguably violate the jurisdictional limitation of the Rules Enabling Act,”
In sum, both before and after Hanna, the above-described decisions show, federal courts have been cautioned by this Court to “interpre[t] the Federal Rules . . . with sensitivity to important state interests,” Gasperini,
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conspicuously, its most recent reiteration in Gasperini, ante, at 405, n. 7,
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 limita
In 1975, the Judicial Conference of the State of New York proposed a new class-action statute designed “to set up a flexible, functional scheme” that would provide “an effective, but controlled group remedy.” Judicial Conference Report on CPLR, reprinted in 1975 N. Y. Laws pp. 1477, 1493 (McKinney). As originally drafted, the legislation addressed only the procedural aspects of class actions; it specified, for example, five prerequisites for certification, eventually codified at § 901(a), that closely tracked those listed in Rule 23. See CPLR § 901(a) (requiring, for class certification, numerosity,
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predominance, typicality, adequacy of representation, and superiority).
While the Judicial Conference proposal was in the New York Legislature’s hopper, “various groups advocated for the addition of a provision that would prohibit class action plaintiffs from being awarded a statutorily-created penalty . . . except when expressly authorized in the pertinent statute.” Sperry v. Crompton Corp.,
Aiming to avoid “annihilating punishment of the defendant,” the New York Legislature amended the proposed statute to bar the recovery of statutory damages in class actions. V. Alexander, Practice Commentaries, C90L11, reprinted in 7B McKinney’s Consolidated Laws of New York Ann., p. 104 (2006) (internal quotation marks omitted). In his signing statement, Governor Hugh Carey stated that the new statute “empowers the court to prevent abuse of the class action device and provides a controlled remedy.” Memorandum on Approving L. 1975, Ch. 207, reprinted in 1975 N. Y. Laws, at 1748 (emphasis added).
“[T]he final bill . . . was the result of a compromise among competing interests.” Sperry,
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damages. The limitation was not designed with the fair conduct or efficiency of litigation in mind. Indeed, suits seeking statutory damages are arguably best suited to the class device because individual proof of actual damages is unnecessary. New York’s decision instead to block class-action proceedings for statutory damages therefore makes scant sense, except as a means to a manifestly substantive end: limiting a defendant’s liability in a single lawsuit in order to prevent the exorbitant inflation of
D
Shady Grove contends—and the Court today agrees—that Rule 23 unavoidably preempts New York’s prohibition on the recovery of statutory damages in class actions. The Federal Rule, the Court emphasizes, states that Shady Grove’s suit “may be” maintained as a class action, which conflicts with § 901(b)’s instruction that it “may not” so proceed. Ante, at 399,
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ante, at 431-436,
The Court, I am convinced, finds conflict where none is necessary. Mindful of the history behind § 901(b)’s enactment, the thrust of our precedent, and the substantive-rights limitation in the Rules Enabling Act, I conclude, as did the Second Circuit and every District Court to have considered the question in any detail,
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but allows state law to control the size of a monetary award a class plaintiff may pursue.
In other words, Rule 23 describes a method of enforcing a claim for relief, while § 901(b) defines the dimensions of the claim itself. In this regard, it is immaterial that § 901(b) bars statutory penalties in wholesale, rather than retail, fashion. The New York Legislature could have embedded the limitation in every provision creating a cause of action for which a penalty is authorized; § 901(b) operates as shorthand to the same effect. It is as much a part of the delineation of the claim for relief as it would be were it included claim by claim in the New York Code.
The Court single-mindedly focuses on whether a suit “may” or “may not” be maintained as a class action. See ante, at 398-401,
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only a procedural disagreement with the federal rulemakers respecting the fairest and most efficient way of conducting litigation.”).
Suppose, for example, that a State, wishing to cap damages in class actions at $1 million, enacted a statute providing that “a suit to recover more than $1 million may not be maintained as a class action.” Under the Court’s reasoning—which attributes dispositive significance to the words “may not be maintained”—Rule 23 would preempt this provision, never mind that Congress, by authorizing the promulgation of rules of procedure for federal courts, surely did not intend to displace state-created ceilings on damages.
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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.,
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explained, “Rule 23’s procedural requirements for class actions can be applied along with the substantive requirement of CPLR 901(b).”
Any doubt whether Rule 23 leaves § 901(b) in control of the remedial issue at the core of this case should be dispelled by our Erie jurisprudence, including Hanna, which counsels us to read Federal Rules moderately and cautions against stretching a Rule to cover every situation it could conceiv
Notably, New York is not alone in its effort to contain penalties and minimum recoveries by disallowing class relief; Congress, too, has precluded class treatment for certain claims seeking a statutorily designated minimum recovery. See, e.g., 15 U.S.C. § 1640(a)(2)(B) (Truth in Lending Act) (“[I]n the case of a class action ... no minimum recovery shall be applicable.”); § 1693m(a)(2)(B) (Electronic Fund
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Transfer Act) (same); 12 U.S.C. § 4010(a)(2)(B)(i) (Expedited Funds 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,
By finding a conflict without considering whether Rule 23 rationally should be read to avoid any collision, the Court unwisely and unnecessarily retreats from the federalism principles undergirding Ene. Had the Court reflected on the respect for state regulatory interests endorsed in our decisions, it would have found no cause to interpret Rule 23 so woodenly—and every reason not to do so. Cf. Traynor, 37 Texas L. Rev., at 669 (“It is bad enough for courts to prattle unintelligibly about choice of law, but
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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,
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 disposi-tive. The provision held “substantive” for Erie purposes in Gasperini is also contained in the CPLR ( § 5501(c)), as are limitations periods, § 201 et seq., prescriptions plainly “substantive” for Erie purposes however they may be characterized for other purposes, see York,
Shady Grove also ranks § 901(b) as “procedural” because “nothing in [the statute] suggests that it is limited to rights of action based on New York state law, as opposed to federal law or the law of other states”; instead it “applies to actions seeking penalties under any statute.” Brief for Petitioner 35-36. See also ante, at 432,
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understood as a rule that . . . serves the function of defining New York’s rights or remedies” because its “text . . . expressly and unambiguously applies not only to claims based on New York law but also to claims based on federal law or the law of any other State.”).
It is true that § 901(b) is not specifically limited to claims arising under New York law. But neither is it expressly extended to claims arising under foreign law. The rule prescribes, without elaboration either way, that “an action to recover a penalty . . . may not be maintained as a class action.” We have often recognized that “general words” appearing in a statute may, in fact, have limited application; “[t]he words ‘any person or persons,’ ” for example, “are broad enough to comprehend every human being. But general words must not only be limited to cases within the jurisdiction of the state, but also to those objects to which the legislature intended to apply them.” United States v. Palmer,
Moreover, Shady Grove overlooks the most likely explanation for the absence of limiting language: New York legislators make law with New York plaintiffs and defendants in mind, i.e., as if New York were the universe. See Baxter, Choice of Law and the Federal System, 16 Stan. L. Rev. 1, 11 (1963) (“[L]awmakers often speak in universal terms but must be understood to speak with reference to their constituents.”); cf. Smith v. United States,
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The point was well put by Brainerd Currie in his seminal article on governmental interest analysis in conflict-of-laws cases. The article centers on a now-archaic Massachusetts law that prevented married women from binding themselves by contract as sureties for their husbands. Discussing whether the Massachusetts prescription applied to transactions involving foreign factors (a foreign forum, foreign place of contracting, or foreign parties), Currie observed:
“When the Massachusetts legislature addresses itself to the problem of married women as sureties, the undeveloped image in its mind is that of Massachusetts married women, husbands, creditors, transactions, courts, and judgments. In the history of Anglo-American law the domestic case has been normal, the conflict-of-laws case marginal.” Married Women’s Contracts: A Study in Conflict-of-Laws Method, 25 U. Chi. L. Rev. 227, 231 (1958) (emphasis added).
Shady Grove’s suggestion that States must specifically limit their laws to domestic rights of action if they wish their enactments to apply in federal diversity litigation misses the obvious point: State legislators generally do not focus on an interstate setting when drafting statutes.
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Shady Grove also observes that a New York court has applied § 901(b) to a federal claim for relief under the Telephone Consumer Protection Act of 1991 (TCPA), 47 U.S.C. §227, see Rudgayzer & Gratt v. Cape Canaveral Tour & Travel, Inc., 22 App. Div. 3d 148,
Moreover, statutes qualify as “substantive” for Erie purposes even when they have “procedural” thrusts as well. See, e.g., Cohen,
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Restatement §§ 142-143 (when adjudicating a foreign cause of action, State may use either its own or the foreign jurisdiction’s statute of limitations, whichever is shorter). Similarly, federal courts sitting in diversity give effect to state laws governing the burden of proving contributory negligence, see Palmer v. Hoffman,
In short, Shady Grove’s effort to characterize § 901(b) as simply “procedural” cannot successfully elide this fundamental norm: When no federal law or rule is dispositive of an issue, and a state statute is outcome affective in the sense our cases on Erie (pre- and post-Hanna) develop, the Rules of Decision Act commands application of the State’s law in diversity suits. Gasperini,
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The “accident of diversity of citizenship,” Klaxon Co. v. Stentor Elec. Mfg. Co.,
It is beyond debate that “a statutory cap on damages would supply substantive law for Erie purposes.” Gasperini,
Gasperini’s observations apply with full force in this case. By barring the recovery of statutory damages in a class action, § 901(b) controls a defendant’s maximum liability in a suit seeking such a remedy. The remedial provision could have been written as an explicit cap: “In any class action seeking statutory damages, relief is limited to the amount the named plaintiff would have recovered in an individual suit.” That New York’s Legislature used other words to express the very same meaning should be inconsequential.
We have long recognized the impropriety of displacing, in a diversity action, state-law limitations on state-created remedies.
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See Woods,
Ill
The Court’s erosion of Erie’s federalism grounding impels me to point out the large irony in today’s judgment. Shady Grove is able to pursue its claim in federal court only by virtue of the recent enactment of the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. § 1332(d). In CAFA, Congress opened federal-court doors to state-law-based class actions so long as there is minimal diversity, at least 100 class
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members, and at least $5 million 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 4 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,
I would continue to approach Erie questions in a manner mindful of the purposes underlying the Rules of Decision Act and the Rules Enabling Act, faithful to precedent, and respectful of important state interests. I would therefore hold that the New York Legislature’s limitation on the recovery of statutory damages applies in this case, and would affirm the Second Circuit’s judgment.
. 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.
. Justice Stevens stakes out common ground on this point: “[F]ederal rules,” he observes, “must be interpreted with some degree of‘sensitivity to important state interests and regulatory policies,’ . . . and applied to diversity cases against the background of Congress’ command that such rules not alter substantive rights and with consideration of ‘the degree to which the Rule makes the character and result of the federal litigation stray from the course it would follow in state courts,’ Hanna [v. Plumer], 380 U.S. [460, 473,
. Even in the mine-run case, a class action can result in “potentially ruinous liability.’’ Advisory Committee’s Notes on Fed. Rule Civ. Proc. 23, 28 U.S.C. App., p. 143. A court’s decision to certify a class accordingly places pressure on the defendant to settle even unmeritorious claims. See, e.g., Coopers & Lybrand v. Livesay,
. See, e.g., In re Automotive Refinishing Paint Antitrust Litigation,
. Shady Grove projects that a dispensation in favor of Allstate would require “courts in all diversity class actions . . . [to] look to state rules and decisional law rather than to Rule 23 . . . in making their class certification decisions.’’ Brief for Petitioner 55. This slippery-slope projection is both familiar and false. Cf. R. Bork, The Tempting of America 169 (1990) (“Judges and lawyers live on the slippery slope of analogies; they are not supposed to ski it to the bottom.’’). In this case, CPLR § 901(a) lists the state-law prerequisites for class certification, but Allstate does not contend that § 901(a) overrides Rule 23. Brief for Respondent 18 (“There is no dispute that the criteria for class certification under state law do not apply in federal court; that is the ground squarely occupied by Rule 23.’’). Federal courts sitting in diversity have routinely applied Rule 23’s certification standards, rather than comparable state provisions. See, e.g., In re New Motor Vehicles Canadian Export Antitrust Litigation,
. The Court disputes the strength of the evidence of legislative intent, see ante, at 403,
. There is, of course, a difference between “justly administering [a] remedy,’’ Sibbach v. Wilson & Co.,
. The Court states that “[w]e cannot rewrite [a state law] to reflect our perception of legislative purpose.” Ante, at 403,
. 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, p. 2, Bill Jacket, L. 1975, Ch. 207. See also State Consumer Protection Board Memorandum (May 29, 1975), Bill Jacket, L. 1975, Ch. 207. On this understanding, New York courts routinely authorize class actions when the class waives its right to receive statutory penalties. See, e.g., Cox v. Microsoft Corp., 8 App. Div. 3d 39,
. The plurality notes that “we have rejected every statutory challenge to a Federal Rule that has come before us ."Ante, at 407,
. 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 399,
. Shady Grove’s argument that § 901(b) is procedural based on its possible application to foreign claims is also out of sync with our Erie decisions, many of them involving state statutes of similarly unqualified scope. The New Jersey law at issue in Cohen v. Beneficial Industrial Loan Corp.,
. In contrast, many “state rules ostensibly addressed to procedure,’’ ante, at 404,
. There is no question that federal courts can “give effect to the substantive thrust of [§ 901(b)] without untoward alteration of the federal scheme for the trial and decision of civil cases.’’ Gasperini,
. It remains open to Congress, of course, to exclude from federal-court jurisdiction under CAFA, 28 U.S.C. § 1332(d), claims that could not be maintained as a class action in state court.