Opinion ID: 451599
Heading Depth: 3
Heading Rank: 2

Heading: The Hanna analysis

Text: 28 Under Hanna, our first step ordinarily would be to determine whether this rule is within the limits of Congress' constitutional power and the Rules Enabling Act. The parties, however, have not attempted to argue that the rule is invalid for either reason. We therefore proceed to consider whether, despite the federal rule's validity and applicability, Erie considerations require us to enforce the state rule in its place. 29 We first look to the policy underlying Erie: the avoidance of forum-shopping and unequal administration of justice. The application of both rule 41(b) and section 583(b) depend on the post-filing conduct of all the parties and the court. We find it difficult to conceive that a plaintiff, before filing a lawsuit, might choose a federal forum rather than a state forum in the expectation that rule 41(b) would lead to a different outcome. Forum-shopping concerns are therefore inapplicable here. 30 We also reject Whittaker's argument that section 583(b) is a statute of limitations and that Ragan dictates that we enforce it in federal court. Initially we note that the section regulates conduct in prosecuting a suit rather than barring commencement of a stale action. Whittaker bases its argument on a California Supreme Court case which notes that some of the policies underlying section 583(b) are the same as the policies behind statutes of limitations. Crown Coach Corp. v. Superior Court, 8 Cal.3d 540, 546, 503 P.2d 1347, 1350, 105 Cal.Rptr. 339, 342 (1972). Nothing in that case, however, nor in any other decision of the California Supreme Court cited to us, indicates that the California court considers section 583(b) a statute of limitations. On the contrary, as discussed above, we find that the California court interprets section 583(b) as providing for discretionary dismissal based on considerations of judicial efficiency and fairness to the parties. We therefore conclude that rule 41(b), rather than section 583(b), applies in diversity actions. 31 The district court dismissed Olympic's complaint and Universal's counterclaim under section 583(b). Because rule 41(b), not section 583(b), governs dismissals for lack of prosecution in diversity suits in federal court, both dismissals were erroneous. The decisions of the district court as to Olympic's claim and Universal's counterclaim are 32 REVERSED and REMANDED.