Guaranty Trust Co. v. York, 326 U.S. 99 (1945)
In deciding whether a law is substantive or procedural under the Erie doctrine, a court should evaluate whether it is outcome-determinative. If it is, it is substantive; if not, it is procedural.
York brought a fraud claim based on a transaction involving Guaranty Trust Co. It was reviewed by a federal court sitting in diversity jurisdiction. Since the claim was based on equity, Guaranty Trust raised the defense of laches. It pointed out that New York rules require that the same statute of limitations that applies to actions at law governs related equitable actions. However, the appellate court ruled that the federal laches doctrine applied rather than the state rule, so York was not prevented from bringing the claim.Opinions
- Felix Frankfurter (Author)
- Harlan Fiske Stone
- Owen Josephus Roberts
- Hugo Lafayette Black
- Stanley Forman Reed
- William Orville Douglas
- Frank Murphy
- Robert Houghwout Jackson
When a federal court has authority to hear a case solely based on diversity jurisdiction, it essentially becomes another state court and cannot reach a substantially different result in enforcing the rights provided by the state. The statute of limitations has a critical impact on the enforcement of a state-created right, since it would have resulted in the dismissal of the case if it had been brought in a state court. Federal courts sitting in diversity should comply with state law when it determines the outcome of the claim.
- Wiley Blount Rutledge (Author)
The law of the forum in which the action is brought determines whether it may be barred, not the law of the state that created the substantive right.Case Commentary
This decision suggests that the difference between procedural law and substantive law in Erie cases hinges on whether the law in question is outcome-determinative, but later decisions have drifted away from this overly straightforward assessment.
U.S. Supreme CourtGuaranty Trust Co. v. York, 326 U.S. 99 (1945)
Guaranty Trust Co. v. York
Argued January 3, 4, 1945
Decided June 18, 1945
326 U.S. 99
In a suit in equity in a federal court to recover upon a State-created right, jurisdiction being based solely upon diversity of citizenship of the parties, a recovery cannot be had if a state statute of limitations would have barred recovery had the suit been brought in a court of the State. Erie R. Co. v. Tompkins, 304 U. S. 64, followed. P. 326 U. S. 108.
143 F.2d 503 reversed.
Certiorari, 323 U.S. 693, to review the reversal of a summary judgment for the defendant (petitioner here) in a suit of which the federal court had jurisdiction solely because of diversity of citizenship of the parties.