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SUN OIL CO. V. WORTMAN, 486 U. S. 717 - Volume 486 - 1988 - Full Text - US Supreme Court Center - USSC Cases - Nolo
US Supreme Court Center > Volume 486 > SUN OIL CO. V. WORTMAN, 486 U. S. 717 (1988) > Full Text
SUN OIL CO. V. WORTMAN, 486 U. S. 717 (1988)
No. 87-352
(a) Kansas did not violate the Full Faith and Credit Clause by applying its own statute of limitations. The holding of M'Elmoyle v. Cohen, 13 Pet. 312, that statutes of limitation may be treated as procedural, and therefore governed by the forum State's law for choice-of-law purposes, was correct when handed down. Petitioner's argument that this traditional view should be abandoned in favor of the modern understanding that statutes of limitations are substantive -- as exemplified by Guaranty Trust Co. v. York, 326 U. S. 99, which so held for Erie doctrine purposes -- is without merit. Guaranty Trust itself rejected the notion that there is an equivalence between what is substantive under
Page 486 U. S. 718
the Erie doctrine and what is substantive for choice-of-law purposes. The adoption of petitioner's argument under the Full Faith and Credit Clause, in the face of the traditional and still subsisting general practice to the contrary, would amount to the improper constitutionalizing of choice-of-law rules, without sufficient guiding standards. Pp. 486 U. S. 722-729.
SCALIA, J., delivered the opinion of the Court, in Part I of which all participating Members joined, in Part II of which REHNQUIST, C.J., and WHITE, STEVENS, and O'CONNOR, JJ., joined, and in Part III of which BRENNAN, WHITE, MARSHALL, BLACKMUN, and STEVENS, JJ., joined. BRENNAN, J., filed an opinion concurring in part and concurring in the judgment, in which MARSHALL and BLACKMUN, JJ., joined, post, p. 486 U. S. 734. O'CONNOR, J., filed an opinion concurring in part and dissenting in part, in which REHNQUIST, C.J., joined, post, p. 486 U. S. 743. KENNEDY, J., took no part in the consideration or decision of the case.
Page 486 U. S. 719
In the 1960's and 1970's, petitioner, a Delaware corporation with its principal place of business in Texas, extracted gas from properties that it leased from respondents. The leases provided that respondents would receive a royalty, usually one-eighth of the proceeds, from the sale of gas. Petitioner sold the gas in interstate commerce at prices that had to be approved by the Federal Power Commission (FPC). The FPC permitted petitioner on several occasions to collect proposed increased prices from customers pending final approval, but required petitioner to refund with interest any amount so collected that was not ultimately approved. Specifically, petitioner had on file with the FPC an undertaking
Page 486 U. S. 720
to comply with regulations, now codified at 18 CFR § 154.102 (1987), requiring petitioner to refund any ultimately unapproved increase plus interest at certain specified rates. § 154.102(c). Petitioner made no royalty payments to respondents on the increased amounts collected until the FPC approved the increases. The respondents' royalty shares of these increases have been called "suspended royalty payments" in this litigation.
In August, 1979, respondents Richard Wortman and Hazel Moore filed a class action in a Kansas trial court on behalf of all landowners to whom petitioner had made or should have made suspended royalty payments, seeking interest on those payments for the period that the payments were held and used by petitioner. The trial court ruled that Kansas law governed
Page 486 U. S. 721
all claims for interest, even claims relating to leases in another State and brought by residents of that State. The court further ruled that, under Kansas law, petitioner was liable for prejudgment interest at the rates petitioner had agreed to pay with respect to customer refunds under the FPC regulations. These rates were 7% per annum prior to October 10, 1974; 9% from then until September 30, 1979; and thereafter the average prime rate compounded quarterly. The trial court relied on Shutts v. Phillips Petroleum Co., 222 Kan. 527, 567 P.2d 1292 (1977) (Shutts I), cert. denied, 434 U.S. 1068 (1978). That case, which also involved suspended royalty payments, had held that Kansas law governed the claims of residents of other States concerning properties in those States, and that, under Kansas law, (1) the royalty owners were entitled to interest on suspended royalty payments because the royalty payments became owing under the royalty contract at the moment the gas company's customers paid the increases, and (2) the interest rate to be used was that set forth in the FPC regulations, because the gas company's corporate undertaking with the FPC constituted an agreement to pay that rate. See 222 Kan. at 562-565, 567 P.2d at 1317-1319.
On the remand in this case, the trial court held that, under the law of the other States that had been held by Shutts III to govern the vast majority of claims, petitioner was liable for interest at the rate specified in the FPC regulations. The trial court further held that nothing in Shutts III precluded the application of Kansas' 5-year statute of limitations to these claims, and that therefore claims for interest on the suspended royalty payments made in July, 1976, were timely.
Page 486 U. S. 722
Pacific Employers Ins. Co. v. Industrial Accident Comm'n, 306 U. S. 493, 306 U. S. 501 (1939). Since the procedural rules of its courts are surely matters on which a State is competent to legislate, it follows that a State may apply its own procedural rules to actions litigated in its courts. The issue here, then, can be characterized as whether a statute of
Page 486 U. S. 723
The first sentence of the Full Faith and Credit Clause was not much discussed at either the Constitutional Convention or the state ratifying conventions. However, the most pertinent comment at the Constitutional Convention, made by James Wilson of Pennsylvania, displays an expectation that would be interpreted against the background of principles developed in international conflicts law. See 2 M. Farrand, The Records of the Federal Convention of 1787, p. 488 (rev. ed.1966). Moreover, this expectation was practically inevitable, since there was no other developed body of conflicts law to which courts in our new Union could turn for guidance. [Footnote 1]
Page 486 U. S. 724
The reported state cases in the decades immediately following ratification of the Constitution show that courts looked without hesitation to international law for guidance in resolving the issue underlying this case: which State's law governs the statute of limitations. The state of international law on that subject being as we have described, these early decisions uniformly concluded that the forum's statute of limitations governed even when it was longer than the limitations period of the State whose substantive law governed the merits of the claim. See Nash v. Tupper, 1 Cai. 402, 412-413 (N.Y. 1803) (citing unreported 1795 New York case,
Page 486 U. S. 725
Page v. Cable, holding the same); Pearsall v. Dwight, 2 Mass. 84, 89-90 (1806); Ruggles v. Keeler, 3 Johns. 263, 267-268 (N.Y. 1808) (Kent, C.J.); Graves v. Graves's Executor, 5 Ky. 207, 208-209 (1810). By 1820, the use of the forum statute of limitations in the interstate context was acknowledged to be "well settled." Medbury v. Hopkins, 3 Conn.472, 473 (1820); accord, Le Roy v. Crowninshield, supra, at 371 ("settled"); cf. 28 U. S. Silliman, 3 Pet. 270, 28 U. S. 276-277 (1830) ("well settled"); Hawkins v. Barney's Lessee, 5 Pet. 457, 30 U. S. 466 (1831) ("not to be questioned"). Obviously, judges writing in the era when the Constitution was framed and ratified thought the use of the forum statute of limitations to be proper in the interstate context. Their implicit understanding that the Full Faith and Credit Clause did not preclude reliance on the international law rule carries great weight.
Moreover, this view of statutes of limitations as procedural for purposes of choice of law followed quite logically from the manner in which they were treated for domestic law purposes. At the time the Constitution was adopted, the rule was already well established that suit would lie upon a promise to repay a debt barred by the statute of limitations -- on the theory, as expressed by many courts, that the debt constitutes consideration for the promise, since the bar of the statute does not extinguish the underlying right, but merely causes the remedy to be withheld. See Little v. Blunt, 26 Mass. 488, 492 (1830) ("[T]he debt remained, the remedy was gone"); See also Wetzell v. Bussard, 11 Wheat. 309, 24 U. S. 311 (1826). This is the same theory, of course, underlying the conflicts rule: the right subsists, and the forum may choose to allow its courts to provide a remedy, even though the jurisdiction where the right arose would not. See Graves v. Graves's Executor, supra, at 208-209 ("The statute of limitations . . . does not destroy the right, but withholds the remedy. It would seem to follow, therefore, that the lex fori,
Page 486 U. S. 726
and not the lex loci, was to prevail with respect to the time when the action should be commenced").
To address the last point first: Guaranty Trust itself rejects the notion that there is an equivalence between what is substantive under the Erie doctrine and what is substantive for purposes of conflict of laws. Id. at 326 U. S. 108. Except at the extremes, the terms "substance" and "procedure" precisely describe very little except a dichotomy, and what they mean in a particular context is largely determined by the purposes for which the dichotomy is drawn. In the context of our Erie jurisprudence, see Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), that purpose is to establish (within the limits
Page 486 U. S. 727
of applicable federal law, including the prescribed Rules of Federal Procedure) substantial uniformity of predictable outcome between cases tried in a federal court and cases tried in the courts of the State in which the federal court sits. See Guaranty Trust, supra, at 326 U. S. 109; Hanna v. Plumer, 380 U. S. 460, 380 U. S. 467, 380 U. S. 471-474 (1965). The purpose of the substance-procedure dichotomy in the context of the Full Faith and Credit Clause, by contrast, is not to establish uniformity, but to delimit spheres of state legislative competence. How different the two purposes (and hence the appropriate meanings) are is suggested by this: it is never the case under Erie that either federal or state law -- if the two differ -- can properly be applied to a particular issue, cf. Erie, supra, at 304 U. S. 72-73; but since the legislative jurisdictions of the States overlap, it is frequently the case under the Full Faith and Credit Clause that a court can lawfully apply either the law of one State or the contrary law of another, see Shutts III, 472 U.S. at 472 U. S. 823 ("[I]n many situations, a state court may be free to apply one of several choices of law"). Today, for example, we do not hold that Kansas must apply its own statute of limitations to a claim governed in its substance by another State's law, but only that it may.
But to address petitioner's broader point of which the Erie argument is only a part -- that we should update our notion of what is sufficiently "substantive" to require full faith and credit: we cannot imagine what would be the basis for such an updating. As we have just observed, the words "substantive" and "procedural" themselves (besides not appearing in the Full Faith and Credit Clause) do not have a precise content, even (indeed especially) as their usage has evolved. And if one consults the purpose of their usage in the full faith and credit context, that purpose is quite simply to give both the forum State and other interested States the legislative jurisdiction to which they are entitled. If we abandon the currently applied traditional notions of such entitlement, we would embark upon the enterprise of constitutionalizing
Page 486 U. S. 728
choice-of-law rules, with no compass to guide us beyond our own perceptions of what seems desirable. [Footnote 2] There is no more reason to consider recharacterizing statutes of limitation as substantive under the Full Faith and Credit Clause than there is to consider recharacterizing a host of other matters generally treated as procedural under conflicts law, and hence generally regarded as within the forum State's legislative jurisdiction. See, e.g., Restatement (Second) of Conflict of Laws § 131 (remedies available), § 133 (placement of burden of proof), § 134 (burden of production), § 135 (sufficiency of the evidence), § 139 (privileges) (1971).
In sum, long established and still subsisting choice-of-law practices that come to be thought, by modern scholars, unwise,
Page 486 U. S. 729
do not thereby become unconstitutional. If current conditions render it desirable that forum States no longer treat a particular issue as procedural for conflict of laws purposes, those States can themselves adopt a rule to that effect, e.g., Heavner v. Uniroyal, Inc., 63 N.J. 130, 135-141, 305 A.2d 412, 415-418 (1973) (statute of limitations), or it can be proposed that Congress legislate to that effect under the second sentence of the Full Faith and Credit Clause, cf. 11 U. S. Duryee, 7 Cranch 11 U. S. 481, 485 (1813); Pacific Employers Ins. Co. v. Industrial Accident Comm'n, 306 U.S. at 306 U. S. 502. It is not the function of this Court, however, to make departures from established choice-of-law precedent and practice constitutionally mandatory. We hold, therefore, that Kansas did not violate the Full Faith and Credit Clause when it applied its own statute of limitations.
Petitioner also makes a due process attack upon the Kansas court's application of its own statute of limitations. [Footnote 3]
Page 486 U. S. 730
Here again neither the tradition in place when the constitutional provision was adopted nor subsequent practice supports the contention. At the time the Fourteenth Amendment was adopted, this Court had not only explicitly approved (under the Full Faith and Credit Clause) forum state application of its own statute of limitations, but the practice had gone essentially unchallenged. And it has gone essentially unchallenged since.
To constitute a violation of the Full Faith and Credit Clause or the Due Process Clause, it is not enough that a
Page 486 U. S. 731
state court misconstrue the law of another State. Rather, our cases make plain that the misconstruction must contradict law of the other State that is clearly established and that has been brought to the court's attention. See, e.g., Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U. S. 93, 243 U. S. 96 (1917); Western Life Indemnity Co. v. Rupp, 235 U. S. 261, 235 U. S. 275 (1914); Louisville & N. R. Co. v. Melton, 218 U. S. 36, 218 U. S. 51-52 (1910); Banholzer v. New York Life Ins. Co., 178 U. S. 402, 178 U. S. 408 (1900); see also Shutts III, supra, at 472 U. S. 834-842 (STEVENS, J., concurring in part and dissenting in part). We cannot conclude that any of the interpretations at issue here runs afoul of this standard.
Petitioner brought to the Kansas court's attention no Texas decision clearly indicating that an agreement to pay interest at a specified rate would not be implied in these circumstances. [Footnote 4] Petitioner's reliance on Phillips Petroleum
Page 486 U. S. 732
Co. v. Stahl Petroleum Co., 569 S.W.2d 480 (Tex.1978), is misplaced. Although that case was similar to the present one on its facts, the point at issue here was neither raised nor decided. In Stahl, the intermediate Texas court had ordered interest paid at the statutory 6% rate. There is nothing
Page 486 U. S. 733
to indicate, however, that the royalty owner had requested anything else, and only the lessee, and not the royalty owner, appealed. Id. at 481. Thus, the Texas Supreme Court's holding that 6% interest was payable is in no way a holding that more than 6% was not. It is far from unconstitutional for the Kansas Supreme Court to anticipate that the Texas Supreme Court would distinguish the case on the eminently reasonable ground that no rate of interest based on an implied agreement was at issue.
3. Louisiana: Finally, petitioner contests the Kansas Supreme Court's interpretation of Louisiana law both as to liability for interest and the rate to be paid. Concerning liability, petitioner relies on Whitehall Oil Co. v. Boagni, 217 So.2d 707 (La. App.1968), aff'd on other issues, 255 La. 67, 229 So.2d 702 (1969). That case involved a situation opposite from that involved here: the gas companies had paid the
Page 486 U. S. 734
royalties on increased prices before FPC approval, and were seeking interest on those payments when the approval did not ensue. It thus involved a claim for unjust enrichment, see 217 So.2d at 709, and does not stand for the proposition that no interest is recoverable on a contractual debt -- which would arguably (if not inevitably) have been governed by the Louisiana statute mandating interest on "[a]ll debts . . . from the time they become due." La.Civ.Code Ann., Art.1938 (West 1977); see also Wurzlow v. Placid Oil Co., 279 So.2d 749, 772-774 (La.App.) (applying Art.1938 to oil and gas royalties), cert. denied, 282 So.2d 140 (La.1973).
I join Parts I and III of the Court's opinion. Although I also agree with the result the Court reaches in Part II, I
Page 486 U. S. 735
reach that result through a somewhat different path of analysis.
Phillips Petroleum, supra, at 472 U. S. 818, quoting
Page 486 U. S. 736
Allstate, supra, at 449 U. S. 312-313 (plurality opinion of BRENNAN, J., joined by WHITE, MARSHALL, and BLACKMUN, JJ.). The constitutional issue in this case is somewhat more complicated than usual, because the question is not the typical one of whether a State can constitutionally apply its substantive law where both it and another State have certain contacts with the litigants and the facts underlying the dispute. Rather the question here is whether a forum State can constitutionally apply its limitations period, which has mixed substantive and procedural aspects, where its contacts with the dispute stem only from its status as the forum.
Were statutes of limitations purely substantive, the issue would be an easy one, for where, as here, a forum State has no contacts with the underlying dispute, it has no substantive interests and cannot apply its own law on a purely substantive matter. Nor would the issue be difficult if statutes of limitations were purely procedural, for the contacts a State has with a dispute by virtue of being the forum always create state procedural interests that make application of the forum's law on purely procedural questions "neither arbitrary nor fundamentally unfair." Phillips Petroleum, supra, at 472 U. S. 818. Statutes of limitations, however, defy characterization as either purely procedural or purely substantive. The statute of limitations a State enacts represents a balance between, on the one hand, its substantive interest in vindicating substantive claims and, on the other hand, a combination of its procedural interest in freeing its courts from adjudicating stale claims and its substantive interest in giving individuals repose from ancient breaches of law. A State that has enacted a particular limitations period has simply determined that, after that period, the interest in vindicating claims becomes outweighed by the combination of the interests in repose and avoiding stale claims. One cannot neatly categorize this complicated temporal balance as either procedural or substantive.
Page 486 U. S. 737
The constitutional question is somewhat less clear where, as here, the forum State's limitations period is longer than that of the claim State. In this situation, the claim State's statute of limitations reflects its policy judgment that, at the time the suit was filed, the combination of the claim State's procedural interest in avoiding stale claims and its substantive interest in repose outweighs its substantive interest in vindicating the plaintiff's substantive rights. Assuming, for the moment, that each State has an equal substantive interest in the repose of defendants, then a forum State that has concluded that its procedural interest is less weighty than that of the claim State does not act unfairly or arbitrarily in applying its longer limitations period. The claim State does not, after all, have any substantive interest in not vindicating rights it has created. Nor will it do to argue that the forum State has no interest in vindicating the substantive rights of nonresidents: the forum State cannot discriminate against
Page 486 U. S. 738
nonresidents, and, if it has concluded that the substantive rights of its citizens outweigh its procedural interests at that period, then it cannot be faulted for applying that determination evenhandedly.
In light of the forum State's procedural interests and the inherent ambiguity of any more refined inquiry in this context, there is some force to the conclusion that the forum State's contacts give it sufficient procedural interests to make it "neither arbitrary nor fundamentally unfair,'" Phillips Petroleum,
Page 486 U. S. 739
472 U.S. at 472 U. S. 818, for the State to have a per se rule of applying its own limitations period to out-of-state claims -- particularly where, as here, the States out of which the claims arise view their statutes of limitations as procedural. See ante at 486 U. S. 729-730, n. 3. The issue, after all, is not whether the decision to apply forum limitations law is wise as a matter of choice-of-law doctrine, but whether the decision is within the range of constitutionally permissible choices, Wells, 345 U.S. at 345 U. S. 516, and we have already held that distinctions similar to those offered above "are too unsubstantial to form the basis for constitutional distinctions," id. at 345 U. S. 517-518 (holding that it is constitutionally irrelevant whether the foreign limitations period is built into the statutory provision creating the out-of-state cause of action at issue). This conclusion may not be compelled, but the arguments to the contrary are, at best, arguable, and any merely arguable inconsistency with our current full faith and credit jurisprudence surely does not merit deviating from 150 years of precedent holding that choosing the forum State's limitations period over that of the claim State is constitutionally permissible.
The Court's technique of avoiding close examination of the relevant interests by wrapping itself in the mantle of tradition is as troublesome as it is conclusory. It leads the Court to assert broadly (albeit in dicta) that States do not violate the Full Faith and Credit Clause by adjudicating out-of-state claims under the forum's own law on, inter alia, remedies, burdens of proof, and burdens of production. Ante at 486 U. S. 728. The constitutionality of refusing to apply the law of the claim State on such issues was not briefed or argued before this Court, and whether, as the Court asserts without support, there are insufficient reasons for "recharacterizing" these issues (at least in part) as substantive is a question that itself presents multiple issues of enormous difficulty and importance which deserve more than the off-hand treatment the Court gives them.
Page 486 U. S. 740
Even more troublesome is the Court's sweeping dictum that any choice-of-law practice that is "long established and still subsisting" is constitutional. Ibid. This statement, on its face, seems to encompass choice-of-law doctrines on purely substantive issues, and the blind reliance on tradition confuses and conflicts with the full faith and credit test we articulated just three years ago in Phillips Petroleum, supra, at 472 U. S. 818. See also Allstate, 449 U.S. at 449 U. S. 308-309, n. 11 (plurality opinion of BRENNAN, J., joined by WHITE, MARSHALL, and BLACKMUN, JJ.) (stating that a 1934 case giving "controlling constitutional significance" to a traditional choice-of-law test "has scant relevance for today"). That certain choice-of-law practices have so far avoided constitutional scrutiny by this Court is, in any event, a poor reason for concluding their constitutional validity. Nor is it persuasive that the practice reflected the rule applied by States or in international law around the time of the adoption of the Constitution, see ante at 486 U. S. 723-726, since "[t]he very purpose of the full faith and credit clause was to alter the status of the several states as independent foreign sovereignties," Milwaukee County v. M. E. White Co., 296 U. S. 268, 296 U. S. 276-277 (1935), not to leave matters unchanged. [Footnote 2/3] The Court never offers a satisfactory
Page 486 U. S. 741
explanation as to why tradition should enable States to engage in practices that, under our current test, are "arbitrary" or "fundamentally unfair." The broad range of choice-of-law practices that may, in one jurisdiction or another, be traditional are not before this Court, and have not been surveyed by it, and we can only guess what practices today's opinion
Page 486 U. S. 742
approves sight unseen. Nor am I much comforted by the fact that the Court opines on the constitutionality of traditional choice-of-law practices only to the extent they are "still subsisting," for few cases involve challenges to practices that no longer subsist. One wonders as well how future courts will determine which practices are traditional enough (or subsist strongly enough) to be constitutional, and about the utility of requiring courts to focus on such an uncertain and formalistic inquiry, rather than on the fairness and arbitrariness of the choice-of-law rule at issue. Indeed, the disarray of the Court's test is amply demonstrated by the fact that two of the Justices necessary to form the Court leave open the issue of whether a forum State could constitutionally refuse to apply a shorter limitations period regarded as substantive by the foreign State, see post at 486 U. S. 743 (O'CONNOR, J., joined by REHNQUIST, C.J., concurring in part and dissenting in part), even though, in many States, the subsisting tradition of applying the forum's limitations period recognizes no exception for limitations periods considered substantive by the foreign State. See generally Restatement (Second) of Conflict of Laws § 143 and Reporter's Note (1971) (collecting cases). [Footnote 2/4]
Page 486 U. S. 743
In my view, however, the Supreme Court of Kansas violated the Full Faith and Credit Clause when it concluded that the three States in question would apply the interest rates
Page 486 U. S. 744
set forth in the regulations of the Federal Power Commission (FPC). The Court correctly states that misconstruing those States' laws would not, by itself, have violated the Constitution, for the Full Faith and Credit Clause only required the Kansas court to adhere to law that was clearly established in those States and that had been brought to the Kansas court's attention. See ante at 486 U. S. 730-731. Under the standard the Court articulates, however, the Clause was violated. Each of the three States has a statute setting an interest rate that is different from the FPC rate, and the Supreme Court of Kansas offered no valid reason whatsoever for ignoring those statutory rates. Neither has this Court suggested a colorable argument that could support the Kansas court's decision, and its affirmance of that decision effectively converts an important constitutional guarantee into a precatory admonition.
On remand, the Supreme Court of Kansas considered the Shutts case first, and then applied the conclusions reached
Page 486 U. S. 745
there in the case before us today. See Shutts v. Phillips Petroleum Co., 240 Kan. 764, 732 P.2d 1286 (1987) (Shutts IV); 241 Kan. 226, 229, 734 P.2d 1190, 1193 (1987) (opinion below). When one reviews the reasoning of the Kansas court, an undertaking that the majority omits without explanation, that court's failure to give full effect -- or any effect -- to the laws of its sister States becomes unmistakable.
"No Texas court ever mentioned the higher rates set by federal regulations to which [the oil and gas company] had
Page 486 U. S. 746
agreed to comply in its corporate undertaking. This issue has not been determined by the Texas Supreme Court."
"In the above cases where interest was awarded, the applicable rate was six percent. However, in First Nat. Bank v. Cit. & So. Bank, 651 F.2d 696 (10th Cir.1981), applying Oklahoma law, a federal circuit court awarded interest at the rate of ten percent as provided in the promissory note, and rejected the argument that interest must be limited to Oklahoma's legal rate of six percent. Therefore, in equity, the corporate undertaking entered
Page 486 U. S. 747
into by [the oil and gas company] and the FPC would probably be viewed by implication as contractual by the Oklahoma courts, and the rates required in 18 CFR § 154.102 (1986) would be imposed, rather than the statutory six percent."
255 La. 67, 74, 229 So.2d 702, 704 (1969) (emphasis added). This holding does not
Page 486 U. S. 748
in any way support the proposition that the Louisiana courts would apply equitable principles to reach a result contrary to that dictated by the language of a Louisiana statute. Thus, the Supreme Court of Kansas again concluded that one of its sister States would decline to apply its own statute, and the Kansas court again failed to offer any colorable support for its conclusion.
The majority does not discuss the Kansas court's analysis of its sister States' statutes, which clearly indicate that rates of 6% or 7% were applicable. Indeed, the Court appears to think that no analysis was necessary, because the Kansas court was not bound by the language of the statutes with which it was confronted. See ante at 486 U. S. 732, n. 4 ("Relief cannot be granted in this Court unless decisions plainly contradicting the Kansas court's interpretations were brought to the Kansas court's attention" (emphasis added; citations omitted)). This suggestion is inconsistent with the language of the Full Faith and Credit Clause, and is not dictated by the holding in any of our previous cases. Nor is the Court on firmer ground when it imagines that the Kansas court merely read "standard contract law" into the statutes of its sister
Page 486 U. S. 749
States. Ibid. The "industry practice" of complying with FPC regulations where they are applicable hardly implies an "industry usage" or "common understanding" under which the terms of those regulations are to be applied in other situations where they are not applicable. Neither the Kansas court nor this Court has pointed to a single instance -- let alone an "industry practice" -- in which an oil company and its lessor agreed that the FPC interest rates would apply in circumstances like those presented here. Unless "industry usage" means "practices that the Supreme Court of Kansas thinks are fair," neither standard contract law nor standard logic will support the majority's attempted defense of the Kansas court's result.
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