Source: http://caselaw.findlaw.com/us-supreme-court/08-1008.html
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Matched Legal Cases: ['§901', '§2072', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§2072', '§901', '§2072', '§901', '§2072', '§901', '§5106', '§901', '§901', '§1332', '§2072', '§901', '§901', '§901', '§626', '§2000', '§901', '§901', '§1252', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§901', '§2072', '§901', '§2072', '§901', '§2072', '§2072', '§2072', '§2072', '§2072', '§2072', '§901', '§901', '§901', '§901', '§2072', '§901', '§2072', '§2072', '§2072', '§1367', '§2072']

SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A. v. ALLSTATE INSURANCE CO. | FindLaw
SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A. v. ALLSTATE INSURANCE CO., (2010)
Argued: November 2, 2009 Decided: March 31, 2010
After respondent Allstate refused to remit the interest due under New York law on petitioner Shady Grove's insurance claim, Shady Grove filed this class action in diversity to recover interest Allstate owed it and others. Despite the class action provisions set forth in Federal Rule of Civil Procedure 23, the District Court held itself deprived of jurisdiction by N. Y. Civ. Prac. Law Ann. §901(b), which precludes a class action to recover a "penalty" such as statutory interest. Affirming, the Second Circuit acknowledged that a Federal Rule adopted in compliance with the Rules Enabling Act, 28 U. S. C. §2072, would control if it conflicted with §901(b), but held there was no conflict because §901(b) and Rule 23 address different issues--eligibility of the particular type of claim for class treatment and certifiability of a given class, respectively. Finding no Federal Rule on point, the Court of Appeals held that §901(b) must be applied by federal courts sitting in diversity because it is "substantive" within the meaning of Erie R. Co. v. Tompkins, 304 U. S. 64 (1938).
Held: The judgment is reversed, and the case is remanded. 549 F. 3d 137, reversed and remanded. Justice Scalia delivered the opinion of the Court with respect to Parts I and II-A, concluding that §901(b) does not preclude a federal district court sitting in diversity from entertaining a class action under Rule 23. Pp. 3-12.
(a) If Rule 23 answers the question in dispute, it governs here unless it exceeds its statutory authorization or Congress's rulemaking power. Burlington Northern R. Co. v. Woods, 480 U. S. 1, 4-5. Pp. 3-4.
(b) Rule 23(b) answers the question in dispute--whether Shady Grove's suit may proceed as a class action--when it states that "[a] class action may be maintained" if certain conditions are met. Since §901(b) attempts to answer the same question, stating that Shady Grove's suit "may not be maintained as a class action" because of the relief it seeks, that provision cannot apply in diversity suits unless Rule 23 is ultra vires. The Second Circuit's view that §901(b) and Rule 23 address different issues is rejected. The line between eligibility and certifiability is entirely artificial and, in any event, Rule 23 explicitly empowers a federal court to certify a class in every case meeting its criteria. Allstate's arguments based on the exclusion of some federal claims from Rule 23's reach pursuant to federal statutes and on §901's structure are unpersuasive. Pp. 4-6. (c) The dissent's claim that §901(b) can coexist with Rule 23 because it addresses only the remedy available to class plaintiffs is foreclosed by §901(b)'s text, notwithstanding its perceived purpose. The principle that courts should read ambiguous Federal Rules to avoid overstepping the authorizing statute, 28 U. S. C. §2072(b), does not apply because Rule 23 is clear. The dissent's approach does not avoid a conflict between §901(b) and Rule 23 but instead would render Rule 23 partially invalid. Pp. 6-12. Justice Scalia, joined by The Chief Justice, Justice Thomas, and Justice Sotomayor, concluded in Parts II-B and II-D:
(a) The Rules Enabling Act, 28 U. S. C. §2072, not Erie, controls the validity of a Federal Rule of Procedure. Section 2072(b)'s requirement that federal procedural rules "not abridge, enlarge or modify any substantive right" means that a 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 v. Wilson & Co., 312 U. S. 1, 14. Though a Rule may incidentally affect a party's rights, it is valid so long as it regulates only the process for enforcing those rights, and not the rights themselves, the available remedies, or the rules of decision for adjudicating either. Rule 23 satisfies that criterion, at least insofar as it allows willing plaintiffs to join their separate claims against the same defendants. Allstate's arguments asserting §901(b)'s substantive impact are unavailing: It is not the substantive or procedural nature of the affected state law that matters, but that of the Federal Rule. See, e.g., id., at 14. Pp. 12-16.
Justice Scalia, joined by The Chief Justice and Justice Thomas, concluded in Part II-C that the concurrence's analysis--under which a Federal Rule may displace a state procedural rule that is not "bound up" or "sufficiently intertwined" with substantive rights and remedies under state law--squarely conflicts with Sibbach's single criterion that the Federal Rule "really regulat[e] procedure," 312 U. S., at 13-14. Pp. 16-22.
Justice Stevens agreed that Federal Rule of Civil Procedure 23 must apply because it governs whether a class must be certified, and it does not violate the Rules Enabling Act in this case. Pp. 1-22. (a) When the application of a federal rule would "abridge, enlarge or modify any substantive right," 28 U. S. C. §2072(b), the federal rule cannot govern. In rare cases, a federal rule that dictates an answer to a traditionally procedural question could, if applied, displace an unusual state law that is procedural in the ordinary use of the term but is so intertwined with a state right or remedy that it functions to define the scope of the state-created right. Examples may include state laws that make it significantly more difficult to bring or to prove a claim or that function as limits on the amount of recovery. An application of a federal rule that directly collides with such a state law violates the Rules Enabling Act. Pp. 1-13. (b) N. Y. Civ. Prac. Law Ann. §901(b), however, is not such a state law. It is a procedural rule that is not part of New York's substantive law. Pp. 17-22.
Scalia, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I and II-A, in which Roberts, C. J., and Stevens, Thomas, and Sotomayor, JJ., joined, an opinion with respect to Parts II-B and II-D, in which Roberts, C. J., and Thomas, and Sotomayor, JJ., joined, and an opinion with respect to Part II-C, in which Roberts, C. J., and, Thomas, J., joined. Stevens, J., filed an opinion concurring in part and concurring in the judgment. Ginsburg, J., filed a dissenting opinion, in which Kennedy, Breyer, and Alito, JJ., joined. SHADY GROVE ORTHOPEDIC ASSOCIATES, P. A.,PETITIONER v. ALLSTATE INSURANCECOMPANY
New York law prohibits class actions in suits seeking penalties or statutory minimum damages.1 We consider whether this precludes a federal district court sitting in diversity from entertaining a class action under Federal Rule of Civil Procedure 23.2
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. 466 F. Supp. 2d 467 (2006). It reasoned that N. Y. Civ. Prac. Law Ann. §901(b), which precludes a suit to recover a "penalty" from proceeding as a class action, applies in diversity suits in federal court, despite Federal Rule of Civil Procedure 23. Concluding that statutory interest is a "penalty" under New York law, it held that §901(b) prohibited the proposed class action. And, since Shady Grove conceded that its individual claim (worth roughly $500) fell far short of the amount-in-controversy requirement for individual suits under 28 U. S. C. §1332(a), the suit did not belong in federal court.3
The Second Circuit affirmed. 549 F. 3d 137 (2008). The court did not dispute that a federal rule adopted in compliance with the Rules Enabling Act, 28 U. S. C. §2072, would control if it conflicted with §901(b). But there was no conflict because (as we will describe in more detail below) the Second Circuit concluded that Rule 23 and §901(b) address different issues. Finding no federal rule on point, the Court of Appeals held that §901(b) is "substantive" within the meaning of Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), and thus must be applied by federal courts sitting in diversity.
The framework for our decision is familiar. We must first determine whether Rule 23 answers the question in dispute. Burlington Northern R. Co. v. Woods, 480 U. S. 1, 4-5 (1987). If it does, it governs--New York's law notwithstanding--unless it exceeds statutory authorization or Congress's rulemaking power. Id., at 5; see Hanna v. Plumer, 380 U. S. 460, 463-464 (1965). We do not wade into Erie's murky waters unless the federal rule is inapplicable or invalid. See 380 U. S., at 469-471.
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 procedural entitlements, see, e.g., 29 U. S. C. §626(c)(1); 42 U. S. C. §2000e-5(f)(1).) Thus, Rule 23 provides a one-size-fits-all formula for deciding the class-action question. Because §901(b) attempts to answer the same question--i.e., it states that Shady Grove's suit "may not be maintained as a class action" (emphasis added) because of the relief it seeks--it cannot apply in diversity suits unless Rule 23 is ultra vires.
The Second Circuit believed that §901(b) and Rule 23 do not conflict because they address different issues. Rule 23, it said, concerns only the criteria for determining whether a given class can and should be certified; section 901(b), on the other hand, addresses an antecedent question: whether the particular type of claim is eligible for class treatment in the first place--a question on which Rule 23 is silent. See 549 F. 3d, at 143-144. Allstate embraces this analysis. Brief for Respondent 12-13.
We disagree. To begin with, the line between eligibility and certifiability is entirely artificial. Both are 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 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, 442 U. S. 682, 699-700 (1979).
Allstate points out that Congress has carved out some federal claims from Rule 23's reach, see, e.g., 8 U. S. C. §1252(e)(1)(B)--which shows, Allstate contends, that Rule 23 does not authorize class actions for all claims, but rather leaves room for laws like §901(b). But Congress, unlike New York, has ultimate authority over the Federal Rules of Civil Procedure; it can create exceptions to an individual rule as it sees fit--either by directly amending the rule or by enacting a separate statute overriding it in certain instances. Cf. Henderson v. United States, 517 U. S. 654, 668 (1996). The fact that Congress has created specific exceptions to Rule 23 hardly proves that the Rule does not apply generally. In fact, it proves the opposite. If Rule 23 did not authorize class actions across the board, the statutory exceptions would be unnecessary.
Allstate next suggests that the structure of §901 shows that Rule 23 addresses only certifiability. Section 901(a), it notes, establishes class-certification criteria roughly analogous to those in Rule 23 (wherefore it agrees that subsection is pre-empted). But §901(b)'s rule barring class actions for certain claims is set off as its own subsection, and where it applies §901(a) does not. This shows, 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 that question the way New York has structured its statute is immaterial. Rule 23 permits all class actions that meet its requirements, and a State cannot limit that permission by structuring one part of its statute to track Rule 23 and enacting another part that imposes additional requirements. Both of §901's subsections undeniably answer the same question as Rule 23: whether a class action may proceed for a given suit. Cf. Burlington, 480 U. S., at 7-8.
The dissent argues that §901(b) has nothing to do with whether Shady Grove may maintain its suit as a class action, but affects only the remedy it may obtain if it wins. See post, at 8-17 (opinion of Ginsburg, J.). Whereas "Rule 23 governs procedural aspects of class litigation" by "prescrib[ing] the considerations relevant to class certification and postcertification proceedings," §901(b) addresses only "the size of a monetary award a class plaintiff may pursue." Post, at 11-12. Accordingly, the dissent says, Rule 23 and New York's law may coexist in peace.
We need not decide whether a state law that limits the remedies available in an existing class action would conflict with Rule 23; that is not what §901(b) does. By its terms, the provision precludes a plaintiff from "maintain[ing]" a class action seeking statutory penalties. Unlike a law that sets a ceiling on damages (or puts other remedies out of reach) in properly filed class actions, §901(b) says nothing about what remedies a court may award; it prevents the class actions it covers from coming into existence at all.4 Consequently, a court bound by §901(b) could not certify a class action seeking both 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 14-15. Even assuming all statutory penalties are waivable,5 the fact that a complaint omitting them could be brought as a class action would not at all prove that §901(b) is addressed only to remedies. If the state law instead banned class actions for fraud claims, a would-be class-action plaintiff could drop the fraud counts from his complaint and proceed with the remainder in a class action. Yet that would not mean the law provides no remedy for fraud; the ban would affect only the procedural means by which the remedy may be pursued. In short, although the dissent correctly abandons Allstate's eligibility-certifiability distinction, the alternative it offers fares no better.
The dissent all but admits that the literal terms of §901(b) address the same subject as Rule 23--i.e., whether a class action may be maintained--but insists the provision's purpose is to restrict only remedies. See post, at 12-15; post, at 15 ("[W]hile phrased as responsive to the question whether certain class actions may begin, §901(b) is unmistakably aimed at controlling how those actions must end"). Unlike Rule 23, designed to further procedural fairness and efficiency, §901(b) (we are told) "responds to an entirely different concern": the fear that allowing statutory damages to be awarded on a class-wide basis would "produce overkill." Post, at 12, 9 (internal quotation marks omitted). The dissent reaches this conclusion on the basis of (1) constituent concern recorded in the law's bill jacket; (2) a commentary suggesting that the Legislature "apparently fear[ed]" that combining class actions and statutory penalties "could result in 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 9 (quoting Memorandum on Approving L. 1975, Ch. 207, reprinted in 1975 N. Y. Laws, at 1748; emphasis deleted), and (4) a state court's statement that the final text of §901(b) " 'was the result of a compromise among competing interests,' " post, at 9 (quoting Sperry v. Crompton Corp., 8 N. Y. 3d 204, 211, 863 N. E. 2d 1012, 1015 (2007)).
This evidence of the New York Legislature's purpose is pretty sparse. But even accepting the dissent's account of the Legislature's objective at face value, it cannot override the statute's clear text. Even if its aim is to restrict the remedy a plaintiff can obtain, §901(b) achieves that end by limiting a plaintiff's power to maintain a class action. The manner in which the law "could have been written," post, at 23, has no bearing; what matters is the law the Legislature did enact. We cannot rewrite that to reflect our perception of legislative purpose, see Oncale v. Sundowner Offshore Services, Inc., 523 U. S. 75, 79-80 (1998).6 The dissent's concern for state prerogatives is frustrated rather than furthered by revising state laws when a potential conflict with a Federal Rule arises; the state-friendly approach would be to accept the law as written and test the validity of the Federal Rule.
The dissent's approach of determining whether state and federal rules conflict based on the subjective intentions of the state legislature is an enterprise destined to produce "confusion worse confounded," Sibbach v. Wilson & Co., 312 U. S. 1, 14 (1941). It would mean, to begin with, that one State's statute could survive pre-emption (and accordingly affect the procedures in federal court) while another State's identical law would not, merely because its authors had different aspirations. It would also mean that district courts would have to discern, in every diversity case, the purpose behind any putatively pre-empted state procedural rule, even if its text squarely conflicts with federal law. That task will often prove arduous. Many laws further more than one aim, and the aim of others may be impossible to discern. Moreover, to the extent the dissent's purpose-driven approach depends on its characterization of §901(b)'s aims as substantive, it would apply to many state rules ostensibly addressed to procedure. Pleading standards, for example, often embody policy preferences about the types of claims that should succeed--as do rules governing summary judgment, pretrial discovery, and the admissibility of certain evidence. Hard cases will abound. It is not even clear that a state supreme court's pronouncement of the law's purpose would settle the issue, since existence of the factual predicate for avoiding federal pre-emption 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 3, 11) that we can (and must) interpret Rule 23 in a manner that avoids overstepping its authorizing statute.7 If the Rule were susceptible of two meanings--one that would violate §2072(b) and another that would not--we would agree. See Ortiz v. Fibreboard Corp., 527 U. S. 815, 842, 845 (1999); cf. Semtek Int'l Inc. v. Lockheed Martin Corp., 531 U. S. 497, 503-504 (2001). But it is not. Rule 23 unambiguously authorizes any plaintiff, in any federal civil proceeding, to maintain a class action if the Rule's prerequisites are met. We cannot contort its text, even to avert a collision with state law that might render it invalid. See Walker v. Armco Steel Corp., 446 U. S. 740, 750, n. 9 (1980).8 What the dissent's approach achieves is not the avoiding of a "conflict between Rule 23 and §901(b)," post, at 17, but rather the invalidation of Rule 23 (pursuant to §2072(b) of the Rules Enabling Act) to the extent that it conflicts with the substantive policies of §901. There is no other way to reach the dissent's destination. We must therefore confront head-on whether Rule 23 falls within the statutory authorization.
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, 326 U. S. 99, 109 (1945). That is not the test for either the constitutionality or the statutory validity of a Federal Rule of Procedure. Congress has undoubted power to supplant state law, and undoubted power to prescribe rules for the courts it has created, so long as those rules regulate matters "rationally capable of classification" as procedure. Hanna, 380 U. S., at 472. In the Rules Enabling Act, Congress authorized this Court to promulgate rules of procedure subject to its review, 28 U. S. C. §2072(a), but with the limitation that those rules "shall not abridge, enlarge or modify any substantive right," §2072(b).
We have long held that this limitation means that the Rule must "really regulat[e] procedure,--the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for disregard or infraction of them," Sibbach, 312 U. S., at 14; see Hanna, supra, at 464; Burlington, 480 U. S., at 8. The test is not whether the rule affects a litigant's substantive rights; most procedural rules do. Mississippi Publishing Corp. v. Murphree, 326 U. S. 438, 445 (1946). What matters is what the rule itself regulates: If it governs only "the manner and the means" by which the litigants' rights are "enforced," it is valid; if it alters "the rules of decision by which [the] court will adjudicate [those] rights," it is not. Id., at 446 (internal quotation marks omitted).
Applying that test, we have rejected every statutory challenge to a Federal Rule that has come before us. We have found to be in compliance with §2072(b) rules prescribing methods for serving process, see id., at 445-446 (Fed. Rule Civ. Proc. 4(f)); Hanna, supra, at 463-465 (Fed. Rule Civ. Proc. 4(d)(1)), and requiring litigants whose mental or physical condition is in dispute to submit to examinations, see Sibbach, supra, at 14-16 (Fed. Rule Civ. Proc. 35); Schlagenhauf v. Holder, 379 U. S. 104, 113-114 (1964) (same). Likewise, we have upheld rules authorizing imposition of sanctions upon those who file frivolous appeals, see Burlington, supra, at 8 (Fed. Rule App. Proc. 38), or who sign court papers without a reasonable inquiry into the facts asserted, see Business Guides, Inc. v. Chromatic Communications Enterprises, Inc., 498 U. S. 533, 551-554 (1991) (Fed. Rule Civ. Proc. 11). Each of these rules had some practical effect on the parties' rights, but each undeniably regulated only the process for enforcing those rights; none altered the rights themselves, the available remedies, or the rules of decision by which the court adjudicated either.
Applying that criterion, we think it obvious that rules allowing multiple claims (and claims by or against 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 that some (even many) plaintiffs will be induced to sue by the availability of a class action is just the sort of "incidental effec[t]" we have long held does not violate §2072(b), Mississippi Publishing, supra, at 445.
Allstate argues that Rule 23 violates §2072(b) because the state law it displaces, §901(b), creates a right that the Federal Rule abridges--namely, a "substantive 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 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 (footnotes omitted).
"[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 restrictions." 380 U. S., at 471.
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 5-7 (Stevens, J., concurring in part and concurring in judgment). The concurrence agrees with us that Rule 23 and §901(b) conflict, post, at 15-16, and departs from us only with respect to the second part of the test, i.e., whether application of the Federal Rule violates §2072(b), post, at 7-13. Like us, it answers no, but for a reason different from ours. Post, at 17-22.
The concurrence would decide this case on the basis, not that Rule 23 is procedural, but that the state law it 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 1. A state procedural rule is not preempted, according to the concurrence, so long as it is "so bound up with," or "sufficiently intertwined with," a substantive state-law right or remedy "that it defines the scope of that substantive right or remedy," post, at 4, 13.
This analysis squarely conflicts with Sibbach, which established the rule we apply. The concurrence contends that Sibbach did not rule out its approach, but that is not so. Recognizing the impracticability of a test that turns on the idiosyncrasies of state law, Sibbach adopted and applied a rule with a single criterion: whether the Federal Rule "really regulates procedure." 312 U. S., at 14.9 That the concurrence's approach would have yielded the same result in Sibbach proves nothing; what matters is the rule we did apply, and that rule leaves no room for special exemptions based on the function or purpose of a particular state rule.10 We have rejected an attempt to read into Sibbach an exception with no basis in the opinion, see Schlagenhauf, 379 U. S., at 113-114, and we see no reason to find such an implied limitation today.
In reality, the concurrence seeks not to apply Sibbach, but to overrule it (or, what is the same, to rewrite it). Its approach, the concurrence insists, gives short shrift to the statutory text forbidding the Federal Rules from "abridg[ing], enlarg[ing], or modify[ing] any substantive right," §2072(b). See post, at 9-10. There is something to that. It is possible to understand how it can be determined whether a Federal Rule "enlarges" substantive rights without consulting State law: If the Rule creates a substantive right, even one that duplicates some state-created rights, it establishes a new federal right. But it is hard to understand how it can be determined whether a Federal Rule "abridges" or "modifies" substantive rights without knowing what state-created rights would obtain if the Federal Rule did not exist. Sibbach's exclusive focus on the challenged Federal Rule--driven by the very real concern that Federal Rules which vary from State to State would be chaos, see 312 U. S., at 13-14--is hard to square with §2072(b)'s terms.11
Sibbach has been settled law, however, for nearly seven decades.12 Setting aside any precedent requires a "special justification" beyond a bare belief that it was wrong. Patterson v. McLean Credit Union, 491 U. S. 164, 172 (1989) (internal quotation marks omitted). And a party seeking to overturn a statutory precedent bears an even greater burden, since Congress remains free to correct us, ibid., and adhering to our precedent enables it do so, see, e.g., Finley v. United States, 490 U. S. 545, 556 (1989); 28 U. S. C. §1367; Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U. S. 546, 558 (2005). We do Congress no service by presenting it a moving target. In all events, Allstate has not even asked us to overrule Sibbach, let alone carried its burden of persuading us to do so. Cf. IBP, Inc. v. Alvarez, 546 U. S. 21, 32 (2005). Why we should cast aside our decades-old decision escapes us, especially since (as the concurrence explains) that would not affect the result.13
The concurrence also contends that applying Sibbach and assessing whether a Federal Rule regulates substance or procedure is not always easy. See post, at 11, n. 10. Undoubtedly some hard cases will arise (though we have managed to muddle through well enough in the 69 years since Sibbach was decided). But as the concurrence acknowledges, post, at 11, the basic difficulty is unavoidable: The statute itself refers to "substantive right[s]," §2072(b), so there is no escaping the substance-procedure distinction. What is more, the concurrence's approach does nothing to diminish the difficulty, but rather magnifies it many times over. Instead of a single hard question of whether a Federal Rule regulates substance or procedure, that approach will present hundreds of hard questions, forcing federal courts to assess the substantive or procedural character of countless state rules that may conflict with a single Federal Rule.14 And it still does not sidestep the problem it seeks to avoid. At the end of the day, one must come face to face with the decision whether or not the state policy (with which a putatively procedural state rule may be "bound up") pertains to a "substantive right or remedy," post, at 19--that is, whether it is substance or procedure.15 The more one explores the alternatives to Sibbach's rule, the more its wisdom becomes apparent.
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 when it comes as the consequence of judge-made rules created to fill supposed "gaps" in positive federal law. See Hanna, 380 U. S., at 471-472. For where neither the Constitution, a treaty, nor a statute provides the rule of decision or authorizes a federal court to supply one, "state law must govern because there can be no other law." Ibid.; see Clark, Erie's Constitutional Source, 95 Cal. L. Rev. 1289, 1302, 1311 (2007). But divergence from state law, with the attendant consequence of forum shopping, is the inevitable (indeed, one might say the intended) result of a uniform system of federal procedure. Congress itself has created the possibility that the same case may follow a different course if filed in federal instead of state court. Cf. Hanna, 380 U. S., at 472-473. The short of the matter is that a Federal