Cite as: 518 U. S. 415 (1996)
Opinion of the Court
Erie read the Rules of Decision Act: 6 "Except in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State." 304 U. S., at 78. Under the Erie doctrine, federal courts sitting in diversity apply state substantive law and federal procedural law.
Classification of a law as "substantive" or "procedural" for Erie purposes is sometimes a challenging endeavor.7 Guaranty Trust Co. v. York, 326 U. S. 99 (1945), an early interpretation of Erie, propounded an "outcome-determination" test: "[D]oes it significantly affect the result of a litigation for a federal court to disregard a law of a State that would be controlling in an action upon the same claim by the same parties in a State court?" 326 U. S., at 109. Ordering application of a state statute of limitations to an equity proceeding in federal court, the Court said in Guar-6 Originally § 34 of the Judiciary Act of 1789, the Rules of Decision Act, now contained in 28 U. S. C. § 1652, reads: "The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply."
7 Concerning matters covered by the Federal Rules of Civil Procedure, the characterization question is usually unproblematic: It is settled that if the Rule in point is consonant with the Rules Enabling Act, 28 U. S. C. § 2072, and the Constitution, the Federal Rule applies regardless of contrary state law. See Hanna v. Plumer, 380 U. S. 460, 469-474 (1965); Burlington Northern R. Co. v. Woods, 480 U. S. 1, 4-5 (1987). Federal courts have interpreted the Federal Rules, however, with sensitivity to important state interests and regulatory policies. See, e. g., Walker v. Armco Steel Corp., 446 U. S. 740, 750-752 (1980) (reaffirming decision in Ragan v. Merchants Transfer & Warehouse Co., 337 U. S. 530 (1949), that state law rather than Rule 3 determines when a diversity action commences for the purposes of tolling the state statute of limitations; Rule 3 makes no reference to the tolling of state limitations, the Court observed, and accordingly found no "direct conflict"); S. A. Healy Co. v. Milwaukee Metropolitan Sewerage Dist., 60 F. 3d 305, 310-312 (CA7 1995) (state provision for offers of settlement by plaintiffs is compatible with Federal Rule 68, which is limited to offers by defendants).
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