Brief Fact Summary. Plaintiff sued a bond trustee in a Federal diversity action. State
substantive law governed. Defendant argued that the suit was barred by the state’s statute
of limitations.
Synopsis of Rule of Law. A matter is considered substantive, for the purposes of
determining whether state or Federal law should apply in a diversity action, when it
significantly affects the result of litigation.
Issue. What constitutes a substantive issue such that state law will apply in a Federal
diversity action?
Held. The Supreme Court of the United States reversed the case and remanded it for
further proceedings, holding that a matter is considered substantive, for the purposes of
determining whether state or Federal law should apply in a diversity action, when it
significantly affects the result of litigation. It is immaterial whether statutes of limitations
are characterized as either substantive or procedural in state court opinions
Contrariwise, a federal court may afford an equitable remedy for a substantive right recognized by a State even though a State court cannot give it.
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