446 U.S. 740 (1980), 78-1862, Walker v. Armco Steel Corp.

Docket Nº:No. 78-1862
Citation:446 U.S. 740, 100 S.Ct. 1978, 64 L.Ed.2d 659
Party Name:Walker v. Armco Steel Corp.
Case Date:June 02, 1980
Court:United States Supreme Court

Page 740

446 U.S. 740 (1980)

100 S.Ct. 1978, 64 L.Ed.2d 659

Walker

v.

Armco Steel Corp.

No. 78-1862

United States Supreme Court

June 2, 1980

Argued January 8, 1980

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

Syllabus

An Oklahoma statute provides that an action shall not be deemed to be "commenced" for purposes of the statute of limitations until service of summons on the defendant, but further provides (§ 97) that, if the complaint is filed within the limitations period, the action is deemed to have commenced from the date of that filing if the plaintiff serves the defendant within 60 days, even though such service occurs outside the limitations period. Federal Rule of Civil Procedure 3 provides that a civil action is commenced by filing a complaint. In this case, petitioner's personal injury action, based on diversity of citizenship, was brought against respondent m Federal District Court in Oklahoma, and, although the complaint was filed within Oklahoma's 2-year statute of limitations, service on respondent was not effectuated until after the 2-year limitation period and the 60-day service period specified in § 97 had expired. The District Court dismissed the complaint as barred by the Oklahoma statute of limitations, holding that § 97 was an integral part of such statute and that, therefore, under Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530, state law, not Rule 3, applied. The Court of Appeals affirmed.

Held: The action is barred by the Oklahoma statute of limitations. Ragan, supra. Pp. 744-753.

(a) The scope of Rule 3 is not sufficiently broad to control the issue before the District Court. Hanna v. Plumer, 380 U.S. 460, distinguished. There is no indication that the Rule was intended to toll a state statute of limitations, much less that it purported to displace state tolling rules for purposes of state statutes of limitations. In diversity actions, Rule 3 governs the date from which various timing requirements of the Federal Rules begin to run, but does not affect state statutes of limitations. Pp. 748-751.

(b) In contrast to Rule 3, the Oklahoma statute is a statement of a substantive decision by that State that actual service on, and accordingly actual notice to, the defendant is an integral part of the policies (establishment of a deadline after which the defendant may legitimately have peace of mind, and recognition that, after a certain period of time, it is unfair to require the defendant to attempt to piece together his defense to an old claim) served by the statute of limitations. Rule 3

Page 741

does not replace such policy determinations found in state law, and that Rule and § 97 can exist side by side, each controlling its own intended sphere of coverage without conflict. Pp. 751-752.

(c) Although, in this case, failure to apply the state service law might not create any problem of forum shopping, the result would be an inequitable administration of the law. There is no reason why, in the absence of a controlling federal rule, an action based on state law which concededly would be barred in the state courts by the state statute of limitations should proceed to judgment in federal court solely because of the fortuity that there is diversity of citizenship between the litigants. Pp. 752-753.

592 F.2d 1133, affirmed.

MARSHALL, J., delivered the opinion for a unanimous Court.

MARSHALL, J., lead opinion

MR. JUSTICE MARSHALL delivered the opinion of the Court.

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

I

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

[100 S.Ct. 1981] Petitioner is a resident of Oklahoma, and respondent is a foreign corporation having its principal place of business in a

Page 742

State other than Oklahoma. Since there was diversity of citizenship, petitioner brought suit in the United States District Court for the Western District of [100 S.Ct. 1979] Oklahoma. The complaint was filed on August 19, 1977. Although summons was issued that same day,1 service of process was not made on respondent's authorized service agent until December 1, 1977.2 On January 5, 1978, respondent filed a motion to dismiss the complaint on the ground that the action was barred by the applicable Oklahoma statute of limitations. Although the complaint had been filed within the 2-year statute of limitations, Okla.Stat., Tit. 12, § 95 (1971),3 state law does not deem the action "commenced" for purposes of the statute of limitations until service of the summons on the defendant,

Page 743

Okla.Stat., Tit. 12, § 97 (1971).4 If the complaint is filed within [100 S.Ct. 1980] the limitations period, however, the action is deemed to have commenced from that date of filing if the plaintiff serves the defendant within 60 days, even though that service may occur outside the limitations period. Ibid. In this case, service was not effectuated until long after this 60-day period had expired. Petitioner in his reply brief to the motion to dismiss admitted that his case would be foreclosed in state court, but he argued that Rule 3 of the Federal Rules of Civil Procedure governs the manner in which an action is commenced in federal court for all purposes, including the tolling of the state statute of limitations.5

The District Court dismissed the complaint as barred by the Oklahoma statute of limitations. 452 F.Supp. 243 (1978). The court concluded that Okla.Stat., Tit. 12, § 97 (1971) was "an integral part of the Oklahoma statute of limitations," 452 F.Supp. at 245, and therefore, under Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530 (1949), state law applied. The court rejected the argument that Ragan had been implicitly [100 S.Ct. 1982] overruled in Hanna v. Plumer, 380 U.S. 460 (1965).

Page 744

The United States Court of Appeals for the Tenth Circuit affirmed. 592 F.2d 1133 (1979). That court concluded that Okla.Stat., Tit. 12, § 97 (171), was in "direct conflict" with Rule 3. 592 F.2d at 1135. However, the Oklahoma statute was "indistinguishable" from the statute involved in Ragan, and the court felt itself "constrained" to follow Ragan. 592 F.2d at 1136.

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

II

The question whether state or federal law should apply on various issues arising in an action based on state law which has been brought in federal court under diversity of citizenship jurisdiction has troubled this Court for many years. In the landmark decision of Erie R. Co. v. Tompkins, 304 U.S. 64 (1938), we overturned the rule expressed in Swift v. Tyson, 16 Pet 1 (1842), that federal courts exercising diversity jurisdiction need not, in matters of "general jurisprudence," apply the nonstatutory law of the State. The Court noted

Page 745

that

[d]iversity of citizenship jurisdiction was conferred in order to prevent apprehended discrimination in state courts against those not citizens of the State,

Erie R. Co. v. Tompkins, supra at 74. The doctrine of Swift v. Tyson had led to the undesirable results of discrimination in favor of noncitizens, prevention of uniformity in the administration of state law, and forum shopping. 304 U.S. at 74-75. In response, we established the rule that

[e]xcept in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any [diversity] case is the law of the State,

id. at 78.

In Guaranty Trust Co. v. York, 326 U.S. 99 (1945), we addressed ourselves to

the narrow question whether, when no recovery could be had in a State court because the action is barred by the statute of limitations, a federal court in equity can take cognizance of the suit because there is diversity of citizenship between the parties,

id. at 107. The Court held that the Erie doctrine applied to suits in equity as well as to actions at law. In construing Erie, we noted that,

[i]n essence, the intent of that decision was to insure that, in all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court.

326 U.S. at 109. We concluded that the state statute of limitations should be applied.

Plainly enough, a statute that would completely bar recovery in a [100 S.Ct. 1983] suit if brought in a State court bears on a State-created right vitally, and not merely formally or negligibly. As to consequences that so intimately affect recovery or non-recovery a federal court in a diversity case should follow State law.

Id. at 110.

The decision in York led logically to our holding in Ragan v. Merchants Transfer & Warehouse Co., supra. In Ragan, the plaintiff had filed his complaint in federal court on September 4, 1945, pursuant to Rule 3 of the Federal Rules of

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Civil Procedure. The accident from which the claim arose had occurred on October 1, 1943. Service was made on the defendant on December 28, 1945. The applicable statute of limitations supplied by Kansas law was two years. Kansas had an additional statute which provided:

An action shall be deemed commenced within the meaning of [the statute of...

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