Document: 486 U.S. 717 108 S.Ct. 2117 100 L.Ed.2d 743 SUN OIL COMPANY, Petitionerv.Richard WORTMAN and Hazel Moore etc. No. 87-352. Argued March 22, 1988. Decided June 15, Syllabus In the 1960's 1970's, petitioner extracted gas from properties leased respondents in Texas, Oklahoma, Louisiana, exchange for agreements to pay royalties. Petitioner's prices interstate sales had be approved by Federal Power Commission (FPC), which permitted collect proposed increased customers prior FPC approval on condition that comply with regulations requiring it refund any ultimately unapproved increase plus interest at specified rates. Petitioner withheld royalties increases until obtained approval. Two of filed a class action Kansas court, seeking suspended payments period they were held used petitioner. The trial court was liable FPC-set rates under Louisiana law, application Kansas' 5-year statute limitations rendered respondents' claims July 1976 timely. Supreme Court affirmed, rejecting petitioner's contentions (1) Full Faith Credit Clause Constitution Due Process Fourteenth Amendment required statutes other States, suit would barred, (2) those same constitutional provisions mandated interpretations States' substantive laws concerning different arrived this case. Held: 1. does not bar forum State's governed law State. Pp. 722-730. (a) did violate applying its own limitations. holding McElmoyle v. Cohen, 13 Pet. 312, 10 L.Ed. 177, limitation may treated as procedural therefore choice-of-law purposes, correct when handed down. argument traditional view should abandoned favor modern understanding are substantive—as exemplified Guaranty Trust Co. York, 326 99, 65 1464, 89 2079, so Erie doctrine purposes—is without merit. itself rejected notion there is an equivalence between what purposes. adoption Clause, face still subsisting general practice contrary, amount improper constitutionalizing rules, sufficient guiding standards. 722-729. (b) due process attack upon Both tradition place provision adopted subsequent establish State has legislative jurisdiction control remedies available courts imposing regulating courts' workload determining claim stale. could have been unfairly surprised established rule. 729-730. 2. or constructions regarding interest, since contradicted no States clearly brought court's attention. pointed authorizing higher than rates, point decisions contradicting conclusion such agreement implied undertaking FPC. Phillips Petroleum Stahl Co., 569 S.W.2d 480 (Tex.), Okla.Stat., Tit. 23, § 8 (1981), Whitehall Oil Boagni, 217 So.2d 707 (La.App.), distinguished. 730-734. 241 Kan. 226, 755 P.2d 488, affirmed. SCALIA, J., delivered opinion Court, Part I all participating Members joined, II REHNQUIST, C.J., WHITE, STEVENS, O'CONNOR, JJ., III BRENNAN, MARSHALL, BLACKMUN, joined. concurring part judgment, MARSHALL post, p. ___. dissenting part, KENNEDY, took consideration decision Gerald Sawatzky, Wichita, Kan., Gordon Penny, Medicine Lodge, respondents. Justice SCALIA Court. 1 Sun Company seeks reversal certain previously Wortman 488 (1987) (Wortman ). Constitution, Art. IV, 1, prohibited allow proceed barred whose governs claim, Clauses courts. We granted certiorari. 484 912, 256, 98 214 (1987). 2 * petitioner, Delaware corporation principal business leases provided receive royalty, usually one-eighth proceeds, sale gas. sold commerce (FPC). several occasions pending final approval, but collected approved. Specifically, file regulations, now codified 18 CFR 154.102 (1987), 154.102(c). made royalty amounts increases. shares these called "suspended payments" litigation. 3 1976, paid $1,167,000 after 1974 through April 1976. These covered 670 properties, 43.7% located 24% 22.8% Louisiana. 1978, $2,676,000 December 1978. 690 40.3% 31.6% 23.6% 4 August 1979, Richard behalf landowners whom payments, ruled even relating another residents further prejudgment agreed respect customer refunds regulations. 7% per annum October 10, 1974; 9% then September 30, 1979; thereafter average prime rate compounded quarterly. relied Shutts 222 527, 567 1292 (1977) (Shutts ), cert. denied, 434 1068, 1246, 55 769 (1978). That case, also involved owners entitled because became owing contract moment company's set forth corporate constituted rate. See 562-565, P.2d, 1317-1319. 5 principles reaffirmed 235 195, 679 1159 (1984) factually similar case involving I. original affirmed strength 236 266, 385 losing companies both cases petitioned 6 reversed apply remanded governing claims. Shutts, 472 797, 816-823, 105 2965, 2976-2980, 86 628 (1985) vacated reconsideration light our III. Wortman, 474 806, 106 40, 88 33 7 On remand govern vast majority claims, nothing precluded first holdings 240 764, 732 1286 IV pending, 87-348. pertinent legal rules consistent III, we review. Court's applied only matters appropriate This long repeatedly their substance must See, e.g., Wells Simonds Abrasive 345 514, 516-518, 73 856, 857-58, 97 1211 (1953); Townsend Jemison, 9 How. 407, 413-420, 194 (1850); 327-328, 177 (1839). certiorari reexamine issue. conclude sound. provides: "Full shall given each public Acts, Records, judicial Proceedings every And Congress Laws prescribe Manner Records proved, Effect thereof." 11 compel "a state substitute states dealing subject matter competent legislate." Pacific Employers Ins. Industrial Accident Comm'n, 306 493, 501, 59 629, 632, 83 940 (1939). Since surely legislate, follows actions litigated issue here, then, can characterized whether considered purposes Clause. 12 initially argues supra, wrongly decided McElmoyle, thus rested two premises, one express implicit. premise reflected rule international time adopted. indisputably correct, see Le Roy Crowninshield, 15 F.Cas. 362, 365, 371 (No. 8,269) (Mass.1820) (Story, J.) (collecting authorities), challenged implicit premise, challenge, properly context consistently sentence much discussed either Constitutional Convention ratifying conventions. However, most comment Convention, James Wilson Pennsylvania, displays expectation interpreted against background developed conflicts law. M. Farrand, 1787, (rev. ed. 1966). Moreover, practically inevitable, body new Union turn guidance.1 14 reported decades immediately following ratification show looked hesitation guidance resolving underlying case: being described, early uniformly concluded forum's longer merits claim. Nash Tupper, Cai. 402, 412-413 (N.Y. 1803) (citing unreported 1795 New York Page Cable, same); Pearsall Dwight, Mass. 84, 89-90 (1806); Ruggles Keeler, Johns. 263, 267-268 1808) (Kent, C.J.); Graves Graves's Executor, Ky. 207, 208-209 (1810). By 1820, use acknowledged "well settled." Medbury Hopkins, Conn. 472, 473 (1820); accord, ("settled"); cf. McCluny Silliman, 270, 276-277, 676 (1830) ("well settled"); Hawkins Barney's Lessee, 457, 466, 190 (1831) ("not questioned"). Obviously, judges writing era framed ratified thought proper context. Their preclude reliance carries great weight. choice followed quite logically manner domestic-law At already well lie promise repay debt limitations—on theory, expressed many courts, constitutes promise, extinguish right merely causes remedy withheld. Little Blunt, 26 492 ("[T]he remained, gone"); Wetzell Bussard, Wheat. 309, 311, 481 (1826). course, rule: subsists, choose provide remedy, though where arose not. ("The . destroy withholds remedy. It seem follow, therefore, lex fori, loci prevail commenced"). 16 historical record shows conclusively, think, society regard provisions, akin validity effect contracts, rather restrictions fashioned As Chancellor Kent explained his landmark work, J. Kent, Commentaries American Law 462-463 (2d 1832): "The constitute litigation sta[l]e demands, question municipal policy regulation, belongs discretion government, consulting convenience." 17 Unable sustain contention substantive, so. agreed, argues, primary function balance competing values repose vindication right; area federal diversity jurisdiction, 2079 (1945). To address last first: rejects conflict laws. U.S., 108, S.Ct., 1469. Except extremes, terms "substance" "procedure" precisely describe very little except dichotomy, mean particular largely determined dichotomy drawn. jurisprudence, R. Tompkins, 304 64, 58 817, 82 1188 (1938), purpose (within limits applicable including prescribed Rules Procedure) substantial uniformity predictable outcome tried sits. Trust, 109, 1469; Hanna Plumer, 380 460, 467, 471-474, 85 1136, 1141, 1143-45, (1965). substance-procedure contrast, delimit spheres competence. How (and hence meanings) suggested this: never law—if differ—can issue, Erie, 72-73, 819; jurisdictions overlap, frequently lawfully contrary another, 823, 2981 ("[I]n situations free choices law"). Today, example, do hold may. 19 But broader part—that update sufficiently "substantive" require full faith credit: cannot imagine basis updating. just observed, words "procedural" themselves (besides appearing Clause) precise content, (indeed especially) usage evolved. if consults full-faith-and-credit context, simply give interested entitled. If abandon currently applied, notions entitlement embark enterprise compass guide us beyond perceptions seems desirable.2 There more reason consider recharacterizing host generally regarded within jurisdiction. Restatement (Second) Conflict 131 (remedies available), 133 (placement burden proof), 134 (burden production), 135 (sufficiency evidence), 139 (privileges) (1971). 20 sum, practices come thought, scholars, unwise, thereby become unconstitutional. current conditions render desirable treat adopt effect, Heavner Uniroyal, Inc., 63 N.J. 130, 135-141, 305 A.2d 412, 415-418 (1973) (statute limitations), legislate second Mills Duryee, Cranch 481, 485, 411 (1813); 502, 633. however, make departures precedent constitutionally mandatory. hold, B 21 makes limitations.3 Here again neither nor supports contention. adopted, explicitly (under forum-state limitations, gone essentially unchallenged. unchallenged since. "If thing practised hundred years common consent, will need strong affect it." Jackman Rosenbaum 260 31, 43 9, 9-10, 67 107 (1922). 22 A work load too stale adjudicated certainly suffices way old Republic. is, short, here "arbitrary unfair," 821-822, 2979, challenge entirely substance. 23 nonresidents property States. complied ruling, unconstitutionally distorted determination 24 violation enough misconstrue Rather, plain misconstruction contradict Pennsylvania Fire Gold Issue Mining & Milling 243 93, 96, 37 344, 345, 61 610 (1917); Western Life Indemnity Rupp, 261, 275, 35 37, 41, 220 (1914); Louisville Nashville Melton, 218 36, 51-52, 30 676, 679-80, 54 921 (1910); Banholzer 178 408, 972, 974, 44 1124 (1900); 834-842, 2985-2990 (STEVENS, part). runs afoul standard. 25 Texas: contests interpretation Texas Texas' statutory 6% "specified parties." Tex.Rev.Civ.Stat.Ann., 5069-1.03 (Vernon 1987). Such express, inferred conduct. Preston Farm Ranch Supply, Inc. Bio-Zyme Enterprises, 625 295, 298, 300 (Tex.1981). setting refundable moneys suspense. 777, 783-784, 790-791, 1298, 1302, 1306; I, attention indicating circumstances.4 (Tex.1978), misplaced. Although present facts, raised decided. Stahl, intermediate ordered indicate, owner requested anything else, lessee appealed. Id., 481. Thus, payable far unconstitutional anticipate distinguish eminently reasonable ground based 27 Oklahoma: Oklahoma liability paid. Concerning liability, relies providing "[a]ccepting payment whole principal, such, waives interest." (1981). event becomes, statute, "principal" owed. Webster Drilling Sterling 376 236, 238 (1962). Regarding provides "in absence parties agree authorized law." 266 founders fact circumstances 28 3. Louisiana: Finally, (La.App.1968), aff'd issues, 255 La. 67, 229 702 (1969). situation opposite here: before ensue. unjust enrichment, So.2d, 709, stand proposition recoverable contractual debt—which arguably (if inevitably) mandating "[a]ll debts due." La.Civ.Code Ann., 1938 (West 1977); Wurzlow Placid 279 749, 772-774 (La.App.) (applying oil royalties), 282 140 (La.1973). 29 Louisiana's applied: above-quoted "unless otherwise stipulated." 1938. stipulation, found Cf. Boutte Chevron 316 F.Supp. 524, 531 (ED La.1970) (dictum) (gas company owe once approves increases), aff'd, 442 F.2d 1337 (CA5 1971). 31 For reasons stated, judgment 32 Affirmed. KENNEDY 34 BLACKMUN join, judgment. join Parts opinion. result reaches II, reach somewhat path analysis. 36 150 years, out-of-state shorter out arose. (1953) (shorter); (1850) (longer); (1839) (shorter). main presented line authority undermined recent constitutionality rules.1 (1985); Allstate Hague, 449 302, 101 633, 66 521 start, Wells, emphasizing "[t]he laws; sets minimum requirements observe asked sister state." 516, 857. imposed Clause2 unless " 'a significant contact aggregation contacts, creating interests, arbitrary fundamentally unfair.' Petroleum, 818, 2978, quoting Allstate, 312-313, 639-40 (plurality joined JJ.). complicated usual typical contacts litigants facts dispute. Rather period, mixed aspects, dispute stem status forum. 38 Were purely easy one, where, dispute, interests matter. Nor difficult procedural, virtue always create questions "neither unfair." 2978. Statutes defy characterization substantive. enacts represents between, hand, vindicating and, combination freeing adjudicating giving individuals ancient breaches enacted becomes outweighed avoiding One neatly categorize temporal 39 Given complex creates wholly clearest adjudication equally in-state outweigh difference; 'neither unfair,' weighty requires earlier bar, nondiscriminatory alike. 40 less clear situation, reflects outweighs plaintiff's rights. Assuming, moment, equal defendants, act arbitrarily period. not, all, rights created. argue nonresidents: discriminate nonresidents, citizens faulted evenhandedly. 41 periods reflect differing assessments complicated. begin with, defendants creator Even assumes latter, thwart assessment relative weights interests. that, standing alone thwarted claim's professed State, according weight gives them. efforts break down weigh components served various would, involve difficult, unwieldy artificial inquiry implicates having administrable rules. 42 inherent ambiguity refined some force Pe- troleum, se claims—particularly arise procedural. ante, 729—730, n. wise range permissible choices, 857, distinctions offered above "are unsubstantial form distinctions," id., 517-518, 858 (holding irrelevant foreign built into cause issue). compelled, arguments best arguable, arguable inconsistency jurisprudence merit deviating choosing over permissible. technique close examination relevant wrapping mantle troublesome conclusory. leads assert broadly (albeit dicta) on, inter alia, remedies, burdens proof, production. Ante, 728. refusing issues briefed argued whether, asserts support, insufficient "recharacterizing" (at least part) presents multiple enormous difficulty importance deserve offhand treatment sweeping dictum "long subsisting" constitutional. Ibid. statement encompass doctrines blind confuses test articulated three ago 308-309, 11, 638, JJ.) (stating 1934 "controlling significance" "has scant relevance today"). avoided scrutiny poor concluding validity. persuasive around 723-726, credit clause alter independent sovereignties," Milwaukee County M.E. White 296 268, 56 229, 234, 80 (1935), leave unchanged.3 offers satisfactory explanation why enable engage test, "arbitrary" "fundamentally broad may, surveyed it, guess today's sight unseen. am comforted opines extent "still subsisting," few challenges subsist. wonders how future determine (or subsist strongly enough) constitutional, about utility focus uncertain formalistic fairness arbitrariness Indeed, disarray amply demonstrated Justices necessary open refuse (O'CONNOR, part), recognizes exception 143 Reporter's Note (1971) cases).4 45 fear rationale considerable mischief corresponding benefit. unfortunate appears misperception resolved conclusively labeling "substantive." Having wrong unanswerable one), wonder resorts analysis answer it. Because believe careful governmental created narrower sounder grounds affirming, concur 46 THE CHIEF JUSTICE joins, part. 47 concludes chose Different might arisen appropriately left unresolved. Accordingly, 48 my view, violated correctly misconstruing adhere 730—731. Under standard articulates, violated. Each rate, valid whatsoever ignoring Neither colorable support decision, affirmance effectively converts important guarantee precatory admonition. 49 equitable justify analogous cases. 720-722; 816, 2976, noted "Oklahoma likely litigation"; "Texas awarded greater 6%, corresponds rate"; Louisiana." 7, 2977, 7. supported propositions citations thoroughgoing treatment" apparent 2977. 50 remand, first, conclusions reached today. ); 490-491 (opinion below). When reviews reasoning omits explanation, failure effect—or effect—to unmistakable. 51 Adhering theory claimed purported apply, concluded: 52 "Under principles, imply binding [the company] funds suspense respective sought company], together accordance (1986) herein. stakeholder originated thoroughly permeated fixed ." 800, 1313. 53 single argument. note statute: 'When parties, six percent allowed accounts contracts ascertaining sum payable, commencing thirtieth (30th) day payable.' 1298 (quoting 1987)) (emphasis added). inapplicable reason. "No ever mentioned undertaking. Court." original; omitted). language specifically theory. cited courts; suggesting "imply agreement" circumstances; adopting "thoroughly affirmative supposing statute. dealt unsatisfactory manner. 57 'The (6%) hereinafter enacted.' 784, 1302 (1981)) entire discussion follows: "In awarded, percent. First Nat. Bank Cit. So. Bank, 651 696 (10th Cir.1981), circuit ten promissory limited Oklahoma's Therefore, equity, entered probably viewed implication imposed, percent." 1302. 60 explain court. equivalent fictional "implied" find (In Hominy, Okla. Citizens Southern Cobb Cty., Marietta, Ga., (CA10 1981), defendant guarantor obligation evidenced note.) Once again, read enrichment shred doing '[a]ll bear seven due, stipulated.' 791, 1307 1977)) After discussing decisions, "We principles. [255] [229 (1969) ]." 793, 1308. 1969 cited. recover lessors revised downwards tied. "to conflicting them." 74, 702, 704 (1969)(emphasis dictated decline failed offer conclusion. 62 bottom, insistence conviction "fair" arising price disapproved inadequate agreement. assuming "fair," obvious, bound judiciary's equity. discuss statutes, indicate applicable. think confronted. 732, ("Relief plainly attention" added; omitted)). suggestion inconsistent previous firmer imagines "standard law" "industry practice" complying hardly implies usage" "common understanding" instance—let practice"—in lessor like here. Unless means "practices thinks fair," logic majority's attempted defense result. 64 Today's discards parts (1985), Faced apparently take steps order avoid First, invent novel strange opportunity reject it; unsupported speculation, "predict" chance. call ignores leaves capacity fulfill purpose. step, instructions respectfully dissent. BRENNAN's concurrence, 740, misunderstands famous sovereignties." true, clear, radically changed enforceable command leaving enforcement vagaries comity. Estin Estin, 334 541, 546, 68 1213, 1217, 92 1561 (1948) (the "substituted comity basically altered sovereigns") concurrence's assertion, 740—741, 3, rely beside point. content (in meet decided) derived source. embodied allows room common-law development, originally embodied. concurrence points development. continues Nor, says, strike accord then-accepted Conflicts 443 (1934) taken position taxes Coe Manufacturing 112 N.J.L. 536, 172 Atl. 198 [ ]," held, enforceable. 278-279, 234-35. pains, moreover, entertain 274-277, 232-34; 279, 235, enforce penalty, 279-280, 235. 443, Comment d (1948 Supp.) (money judgments tax "since deemed penalties"). Contrary 739-742, unusual approach. regularly Young United ex rel. Vuitton et Fils, S.A., 787, 795, 2124, 2131, 95 740 (Article III); Tull 417 - 421, 1831, 1835-1837, 365 (Seventh Amendment); Aetna Lavoie, 475 813, 820-821, 1580, 1584-1585, 823 (disqualification judges); Press-Enterprise Superior California, Riverside County, 464 505-508, 104 819, 821-23, 78 629 (openness jury selection process); Northern Pipeline Construction Marathon Pipe Line 458 50, 57-60, nn. 10-11, 64-76, 25, 86-87, 39, 102 2858, 2864-65, 2867-74, 2879-80, 598 (1982) 90-91, 2881 (REHNQUIST, judgment); Nixon, 418 683, 696, 94 3090, 3101, 1039 (1974) ("In sense, controversy kind traditionally resolve"). citation, criticism plurality Hartford Delta Pine Land 292 143, 634, 1178 (1934), contrary. enshrines contracting contract. tradition, been, escape devices policy, performance performance. takes up devotes logically, dependent possibly considers (1971), concedes, Tr. Oral Arg. 4-5, (apart here) see, Los Angeles Airways, Lummis, 603 246, 248 (Tex.Civ.App.1980), 455 988, 1610, 71 847 (1982); Natural Gas Cities Service 507 1236, 1242 (Okla.), 409 1052, 93 559, 506 (1972); Kirby Lumber Hicks 144 473, 475, 663 (1919). problem disposition invalid—that they, Kansas, compelled nub controversy, words, scope principally done, traversing covered, brief. partial dissent's dissatisfaction let infra, 733-734, rest premises: threshold supporting be, 734-744, 745-746, 746—747, 748, met manifest departure normal Post, 746, 748-749. correct. placing initial respondent flatly Relief (1914) ("If existed, incumbent prove fact"); N.O.R. Miller, 221 416, 534, 789 (1911) ("There allegation proof resort ruling duty decide judgment"); 52, 680, (1910) ("[S]uch settled construction pleaded proved"). Second, dissent assume promisor conscious assumption bound. party custom he unaware indeed positively intended U.C.C. §§ 1-201(3), 1-205(3), 4, U.L.A. 44, (1976); Contracts 221, (as reference indemnity lessors) evidence industry understanding," 1-205, 86) FPC-prescribed (describing showing practice"). Especially existence fact, 1-205(2), 84; 219, a; 222(2), particularly inappropriate suggest referred known rejection additional judged "outcome-determinative" 726 727. are, 818-819, 2978-79, 308, 637, (1981) JJ.); 332, 650 (Powell, Burger, dissenting). miscites (1948), command. 723—724, notes comity," nowhere substituted refers decides carefully examining applied. 546-549, 1217-18. Similarly, behind local "too trivial serious weighed [foreign] challenged." 277, 234. expressly obligated conflicted then-subsisting) unenforceable. declining follow Laws). 159 (Supp.1948) (explaining modified invalidated stated 278, enforcing accorded doctrine. E. Scoles P. Hay, 24.19, 24.23 (1982). apply. Her Majesty, Queen Right Province British Columbia Gilbertson, 597 1161, 1163-1166, (CA9 1979); Commissioner Taxes, Federation Rhodesia McFarland, [1965(1) ] S.A. 470, (South Africa Sup.Ct.1964); Harden, [1963] S.C.R. 366 (Canada Sup. Ct.); Uniform Foreign Money-Judgments Recognition Act 1(2), 263 (excluding Act) (adopted States); Judgments (Reciprocal Enforcement) Act, 1933, Geo. 5, ch. 13, pt. 1(2)(b) (same). invalidate barring penalty irrelevant—Milwaukee reasoned presented, them sacrosanct. simple remains addressed justifying "Of arbiter," 274, 232, existing practice. misses stating relying "unusual." 728, contexts examined abandoning "interest-contacts" laws, confused purposeless. heaps confusion "traditional asserting applies "could been." ___, doubt remarkable dominant 332 (1934). True, commanded consensus, "subsisted" 18.21, 666-667. lack "escape devices" "subsisting tradition" governs, allowing "built into" right, attributes borrowing cases).

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