Concept
Is the Rule Valid?
Federal rule or statute on point
Is the Rule Valid?
A Federal Rule that collides with a state rule must still be valid before it displaces anything. Collision answers a question of coverage: the Rule speaks to the issue the state rule addresses. Validity answers a question of authority: whether the people who wrote the Rule had power to write it. Shady Grove Orthopedic Associates v. Allstate Insurance Co. stated the statutory test in two parts. A Federal Rule is valid if it deals with practice or procedure and does not abridge, enlarge, or modify a substantive right.1
Authority reaches a Rule in two layers. The Supreme Court promulgates the Rules under a delegation from Congress, so a Rule is valid only if Congress could have enacted it and the Rules Enabling Act authorizes it.2 The Act speaks in two sentences that do different work. The first authorizes rules of “practice and procedure,” and so sorts Rules by what they regulate. The second forbids rules that “abridge, enlarge or modify any substantive right,” and so polices the edge of the first. A Rule that satisfies the first sentence can still fail the second, and a court therefore asks the two questions separately.3
The posture of this step favors the Rule. When a Federal Rule covers the situation, the court has been instructed to apply it, and may refuse only if the Advisory Committee, the Supreme Court, and Congress all erred in their prima facie judgment that the Rule respects the Enabling Act and the Constitution.4 The record bears that presumption out. Hanna and Shady Grove each upheld the Rule before them, and the Supreme Court has never invalidated a Federal Rule of Civil Procedure.5 A state’s claim that its own rule serves a substantive policy does not change the analysis under the Shady Grove plurality, because validity turns on the nature of the Federal Rule and not on the purpose of the state law it displaces.6 The subsections below take the layers in order, beginning with the constitutional threshold and then following the two sentences of the Act.
Constitutional Authority
Hanna answered the constitutional question by pointing to the source of congressional power over the federal courts. The constitutional provision for a federal court system, augmented by the Necessary and Proper Clause, carries with it power to make rules governing practice and pleading in those courts. That power reaches matters in the uncertain area between substance and procedure, so long as they are “rationally capable of classification as either.”7 On that footing the Court held that Rule 4(d)(1), which controls service of process in diversity actions, neither exceeded the Enabling Act’s mandate nor transgressed constitutional bounds, and that the Rule is the standard against which service must be measured.8
The question is framed around Congress because the Supreme Court writes the Rules under a delegation from Congress, and a delegate holds no more power than the body that delegates. A Rule is constitutional if Congress could have enacted it directly, and a constitutional Rule displaces conflicting state law: Rule 4(d)(1) “is valid and controls the instant case.”9
The threshold is low by design. Some commentators conclude that Congress and the Court have broad constitutional authority to promulgate any Rule that is “arguably procedural,”10 and the Shady Grove plurality said that Congress may prescribe rules for the courts it has created so long as those rules regulate matters “rationally capable of classification” as procedure.11 Because the border between substance and procedure is uncertain, the standard asks only whether the Rule can sensibly be classified as procedural. The Rule also arrives with a presumption in its favor. When a situation is covered by a Federal Rule, the question for the court is “a far cry from the typical, relatively unguided Erie choice”: the court has been instructed to apply the Rule.12
What separates a Rule that clears this layer from a rule that would not? Rule 4(d)(1) prescribes how a defendant is notified that suit has been instituted. That subject is part of the machinery of a lawsuit, so classifying it as procedural takes no strain.13 The duty of care a railroad owes a trespasser sits at the opposite pole. Erie involved no Federal Rule and a question “substantive” in every traditional sense, and in that category the federal court must follow state law because it has no power to create a separate federal rule.14 The difference lies in what each provision regulates: how a court processes a dispute in one, and what the parties owed one another before any dispute began in the other.
Students often assume that Erie sets the outer limit on the Rules, since both concern the border between federal and state authority. Hanna says otherwise. Erie “surely neither said nor implied that measures like Rule 4 (d) (1) are unconstitutional,” because the power over practice and pleading in federal courts supports a Rule that regulates the court’s own process.15 Nor did York or the cases following it suggest that the rule for situations where no Federal Rule applies is coextensive with the limitation on Congress to which Erie had adverted.16 The two inquiries do different jobs. When no Rule covers the situation, the court makes a relatively unguided Erie choice; when a Rule does cover it, the court applies the Rule unless the rulemakers erred. To hold that a Rule must cease to function whenever it alters the mode of enforcing state-created rights “would be to disembowel either the Constitution’s grant of power over federal procedure or Congress’ attempt to exercise that power in the Enabling Act.”17 An answer that tests a Federal Rule’s constitutionality against Erie’s outcome-based concerns therefore applies the wrong test to the wrong question.
The same power covers the housekeeping rules that Congress writes itself: Erie and its offspring cast no doubt on Congress’s long-recognized power to prescribe such rules for federal courts, even though some will inevitably differ from comparable state rules.18 Evidence law shows where the line gets hard to draw. Rules that in form regulate only evidence, but in fact are closely associated with substantive rights, such as rules on burden of proof and presumptions about the elements of a claim or defense, have always followed state law in diversity cases, though grey areas remain.19
Passing this layer establishes only the outer boundary. The Act’s second sentence suggests further limits on the rulemaking power of the federal judiciary that could call a Rule’s validity into question,20 so a Rule that clears the constitutional test has cleared only the first of its hurdles.
Procedural Under Section 2072(a)
The Act’s first sentence reaches rules governing “the practice and procedure of the district courts,” and Hanna tested Rule 4(d)(1) against the standard of Sibbach v. Wilson & Co.: a Rule is within the delegation if it “really regulates procedure,—the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for disregard or infraction of them.” Rule 4(d)(1) passed because it prescribes the manner in which a defendant is notified that suit has been instituted, a subject that relates to the practice and procedure of the district courts.22
The labels can mislead here. Hanna applied the Sibbach test to the Act’s grant of power over practice and procedure, while the Shady Grove plurality treated the same test as the meaning of the limitation in § 2072(b), the second sentence.23 Whichever sentence is credited, one question controls: what does the Rule itself regulate?
The test sorts Rules by subject. Substantive law supplies the rights and duties, such as what a railroad owes a trespasser, and procedure supplies the machinery for enforcing them. The Shady Grove plurality compressed the line into two phrases. A Rule that governs only “the manner and the means” by which litigants’ rights are “enforced” is valid, and a Rule that alters “the rules of decision by which [the] court will adjudicate [those] rights” is not.24 The line sits there because most procedural rules affect litigants’ rights in some practical way. In Mississippi Publishing Corp. v. Murphree, the Court observed that most alterations of the rules of practice and procedure affect litigants’ rights, and that Congress’s prohibition on altering substantive rights “was obviously not addressed to such incidental effects as necessarily attend the adoption of the prescribed new rules of procedure.”25 A test that asked whether a Rule affects rights would condemn nearly all of them, so the test asks instead what the Rule itself regulates.26
The test also examines the Rule alone. “[I]t is not the substantive or procedural nature or purpose of the affected state law that matters, but the substantive or procedural nature of the Federal Rule.”27 The plurality read Sibbach to say the same thing: a Federal Rule is not valid in some jurisdictions and invalid in others, or valid in some cases and invalid in others, depending on whether its effect is to frustrate a state substantive law. Hanna, the plurality added, expressed the same understanding, that compliance with the Enabling Act is assessed by consulting the Rule itself and not its effects in individual applications.28 A Rule is therefore tested once, on its face. If it regulates procedure, it is authorized by § 2072 and valid in all jurisdictions, with respect to all claims, regardless of its incidental effect on state-created rights.29
Shady Grove measured Rule 23 by this yardstick. Rule 23, at least insofar as it lets willing plaintiffs join their separate claims against the same defendants in a class action, neither changes the plaintiffs’ separate entitlements to relief nor abridges the defendants’ rights. It alters only how the claims are processed.30 The insurer objected that class treatment is not substantively neutral, because it turns a dispute over a five-hundred-dollar penalty into one over five million dollars. The plurality answered that the insurer’s aggregate liability does not depend on whether the suit is a class action, since each of the thousand-plus class members could sue individually. That some plaintiffs are induced to sue by the availability of a class is the sort of “incidental effect” that does not violate § 2072(b).31 The plurality added that the Court had so far rejected every statutory challenge to a Federal Rule, including Rules on serving process, on physical and mental examinations, on sanctions for frivolous appeals, and on signing court papers without reasonable inquiry.32
A Rule would fail the test only by going past process into the content of the parties’ rights.
Rule 23 leaves each party with the entitlements and defenses that separate suits would present, while the monopoly-contract Rule would remove an entitlement outright.33 Writing the content of rights belongs to Congress, and the Court holds power over any rule of procedure.34 Both Rules might change who wins a given case. The difference is what each regulates: how the claims are handled in one, and what the claims are worth in the other. One decision upholding a Rule put the point this way: a Rule is truly procedural because it governs the in-court dispute resolution processes rather than the dispute that brought the parties into court.35
Students often carry the Erie meaning of “substantive” into this step, and the two meanings do not match. Hanna confronted the syllogism that Erie, as refined in Guaranty Trust Co. v. York, demands state law whenever applying federal law would alter the outcome, and it found the argument invalid despite its appealing simplicity.36 Rule 4(d)(1) was outcome determinative in the literal sense. A holding that the state service requirements governed meant immediate victory for the respondent, while a holding that the Rule applied meant the litigation would continue, and the Rule was still valid and controlling.37 The Shady Grove plurality confirmed that Erie’s touchstone, whether a rule “significantly affect[s] the result of a litigation,” is not the test for either the constitutionality or the statutory validity of a Federal Rule.38 “Substance” must therefore mean something different in the Federal Rules context than under the outcome-determinative test, or there would be no need for separate analyses under the two parts of Hanna.39
In practice this step favors the Rule heavily. A Rule need only be arguably procedural. Even one placing the burden of proof on the plaintiff to establish title to property might fail York’s outcome-determination test and still survive the first sentence, because it governs the method of proof at trial.40 Hanna’s approach also compares well with the alternatives. Chief Justice Warren’s opinion has been praised as a simple and clear test for the validity of federal procedural practices, while Justice Harlan’s primary-conduct approach raises problems of vagueness and nonobjectivity and merely calls for a new definition of “substantive.”41 The harder question, whether a Rule that clears the first sentence can still abridge, enlarge, or modify a substantive right, is the subject of the next subsection.
The Substantive Rights Proviso
The second sentence of the Rules Enabling Act, 28 U.S.C. § 2072(b), provides that the Court’s rules “shall not abridge, enlarge or modify any substantive right.”43 It is a separate hurdle. A Rule that is procedural under the first sentence is still invalid under the second if it impinges on substantive rights, so the elusive line between substance and procedure reappears at this step.44 What the proviso adds to the first sentence is the open question. The Court has said that the Rules must be tested against § 2072(b), but it has not said exactly how.45 The Shady Grove plurality read the second sentence through the Sibbach test, which asks what a Rule regulates and not what it affects. The proposals below try to say more about where that boundary falls.
In practice the proviso has almost never decided a case. The Supreme Court has never invalidated a Federal Rule of Civil Procedure, and stare decisis now protects the Sibbach reading of the Act that the Court applied in Shady Grove.46 Two features of the doctrine explain the record. Nearly every procedural rule affects a litigant’s practical position, so a proviso read to forbid any effect on rights would condemn the Rules wholesale. The Court has therefore held, in Burlington Northern R. Co. v. Woods, that incidental effects on a substantive right do not render a Federal Rule invalid.47 And the Court has upheld Rules on service of process, on physical and mental examinations, and on sanctions for frivolous appeals and for signing court papers without reasonable inquiry. Each had some practical effect on the parties’ rights, but each regulated only the process of enforcing them.48
When a Rule does seem to press against the proviso, the Court has preferred to read it narrowly. In Semtek International Inc. v. Lockheed Martin Corp., the Court suggested that Rule 41(b) might run afoul of the proviso if it established a claim-preclusion rule different from the applicable state rule, and it escaped the risk by holding the Rule inapplicable.49 The Court has also suggested that civil rules governing the preclusive effect of federal judgments would lie beyond the rulemaking power.50 The proviso’s main work has thus been done through construction, the narrowing technique covered earlier in this chapter, and not through invalidation.
If the proviso rarely invalidates anything, its purpose shows what it is meant to protect. Some read the no-abridgement provision as protecting state substantive law in keeping with Erie values, while others read it as preserving congressional primacy over rules that affect substantive rights.51 The Rules also govern federal-question cases, where no state law is in play, so the same line must be drawn there between the substance of the claim, which the proviso reserves to Congress, and the procedural methods of processing the case, which the Court may regulate.52 That fact fits the second account better than the first. The debates over the Act repeatedly cited limitations periods as examples of substantive rights that should not be subject to Court rulemaking.53 On either account the mechanism is the same: a delegated rulemaker who could set a limitations period, create a privilege, or reshape fee-shifting would be making choices that depend on policies outside the business of the courts, and the proviso leaves those choices with Congress.
The Court has announced no test for locating the boundary, but judges and commentators have proposed several. Each tries to separate the court’s own business from everything else:
- Professor John Hart Ely suggested that a Rule affects substantive rights if it affects a state right “granted for one or more nonprocedural reasons, for some purpose or purposes not having to do with the fairness or efficiency of the litigation process.”54
- A second formulation asks whether the Rule would alter existing remedial rights conferred as an integral part of the applicable substantive scheme, such as an arrangement for attorney’s fees. On this view § 2072 allocates to Congress those lawmaking choices that “necessarily and obviously require consideration of policies extrinsic to the business of the courts,” such as recognizing a testimonial privilege.55
- A student note proposed treating a right as substantive if the parties, stating their claims and defenses to each other on the eve of suit, would invoke it in making the strongest case on the merits.56
- Justice Harlan, concurring in Hanna, would have state law govern “primary private activity” that occurs before and independent of litigation, as distinct from litigation-related matters such as the method of service of process. A later section develops his approach.57
These proposals send particular Rules to predictable places. A Rule placing the burden of proof on the plaintiff clears the first sentence, but rules on burden of proof and on presumptions about the elements of a claim or defense are closely associated with substantive rights, and federal courts have always applied state rules on those matters in diversity cases.58 A Rule that overrode state law on attorney’s fees or on a testimonial privilege would be a strong candidate for invalidity under the second formulation, because it would reach remedial rights integral to the substantive scheme or make a choice that depends on policies outside the business of the courts.59
Rule 15(c) shows the proviso at work. The Rule governs the relation back of amended pleadings. In a diversity case the Supreme Court construed it to let an amendment changing parties relate back only if the new party had notice of the suit before the limitations period ran, and it reached that result wholly as a construction of the Rule, without discussing what a state court might have done.60 That silence left a proviso question open. A state that relates amendments back more generously than the Rule has weighed repose against the value of deciding claims on the merits, and applying the narrower federal Rule in place of its rule can look like a modification of the right the state created. The First Circuit, in an opinion by Judge Aldrich in Marshall v. Mulrenin, concluded that it would.
The rulemakers resolved the doubt in 1991. Rule 15(c), now in subsection (c)(1)(A), provides that an amendment relates back if the law that provides the statute of limitations applicable to the action permits it.61 A more generous state rule thus displaces the Rule’s narrower conditions, while a stricter state rule does not displace the Rule, so the Rule operates as a one-way ratchet toward relation back. The episode shows how the proviso usually operates: the rulemakers wrote deference to state law into the Rule, and no Rule was struck down.
The Rule is arguably procedural, since it concerns when a case may be filed, and the first sentence asks little. The trouble lies in the second sentence. The debates over the Act cited limitations periods as substantive rights that should not be subject to Court rulemaking,62 and under Ely’s formulation a limitations period protects a defendant’s repose, a purpose that has nothing to do with the fairness or efficiency of litigation.63 Rule 15(c) operates inside an action already pending against a defendant who had notice, while the hypothetical Rule would replace the state’s judgment about how long a claim lives. The proviso restrains delegated rulemaking, and statutes that Congress enacts itself raise a different question, taken up in the section on federal statutes.64 How the Shady Grove opinions applied the proviso is covered below.