480 U.S. 1, 4–5 (1987)
Respondents brought this tort action in Alabama state court to recover damages for injuries sustained in a motorcycle accident.1 Petitioner removed the case to a Federal District Court having diversity jurisdiction.2 A jury trial resulted in a judgment of $800,000 for respondent Alan Woods and $5,000 for respondent Cara Woods.3
Petitioner posted bond to stay the judgment pending appeal, and the Court of Appeals affirmed without modification.4 768 F.2d 1287 (CA11 1985).
Respondents then moved in the Court of Appeals, pursuant to Ala. Code § 12-22-72 (1986), for imposition of that State’s mandatory affirmance penalty of 10% of the amount of judgment.5 Petitioner challenged the application of this statute as violative of the equal protection and due process guarantees of the Fourteenth Amendment and as “a procedural rule . . . inapplicable in federal court under the doctrine of Erie Railroad Co. v. Tompkins, 304 U. S. 64 (1938) and its progeny.”6 The Court of Appeals summarily granted respondents’ motion to assess the penalty and subsequently denied a petition for rehearing.7 The parties have stipulated that the final judgment has been paid, except for the $30,500 statutory affirmance penalty, which petitioner has withheld pending proceedings in this Court.8
The Supreme Court granted certiorari to consider the equal protection and due process challenges as well as the Erie claim.9 475 U. S. 1080 (1986).
Whether, in diversity actions, federal courts must apply a state statute that imposes a fixed penalty on appellants who obtain stays of judgment pending unsuccessful appeals?10
In Hanna v. Plumer the Court established that the initial inquiry is whether a Federal Rule of Appellate Procedure, fairly construed, is sufficiently broad to cause a direct collision with state law or to control the issue before the court, leaving no room for the state law to operate.11 If such a collision exists the Federal Rule must be applied provided it represents a valid exercise of rulemaking authority under the Constitution and the Rules Enabling Act, which requires only that the Rule regulate matters rationally capable of classification as procedural and not abridge, enlarge, or modify any substantive right.12
No. The Alabama statute automatically imposes a 10% penalty whenever a money judgment is stayed by bond and affirmed without substantial modification.13 Rule 38 of the Federal Rules of Appellate Procedure, by contrast, grants courts of appeals discretion to award just damages only upon a determination that an appeal is frivolous.14 This mandatory operation directly collides with the discretionary mechanism of the Federal Rule.15 The purposes of the two provisions are sufficiently coextensive that the Federal Rule occupies the field.16
The Rule regulates matters rationally classifiable as procedural without abridging substantive rights.17 Consequently the Federal Rule governs and the state statute has no application in federal diversity actions.18
Federal courts sitting in diversity are not required to apply the Alabama mandatory affirmance penalty statute.19
Whether the Alabama statute violates the equal protection and due process guarantees of the Fourteenth Amendment?20
Because we conclude that the Alabama statute imposing a mandatory affirmance penalty has no application in federal diversity actions, we decline to reach the Fourteenth Amendment issues.21
Yes. The Court did not decide whether the Alabama statute violates the equal protection and due process guarantees of the Fourteenth Amendment because it resolved the case on the Erie claim.22 Having determined that the Alabama statute has no application in federal diversity actions, the Court expressly declined to reach or resolve the constitutional challenges under the Fourteenth Amendment.23
The Court did not decide whether the Alabama statute violates the equal protection and due process guarantees of the Fourteenth Amendment.24