UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 5, No.2SPRING 1982
CASENOTES
Walker v. Armco Steel Corporation: The Jurisprudence of Federal Rule 3
Theresa B. Doyle
I. Introduction
The Federal Rules of Civil Procedure were designed to bring procedural uniformity to the federal court system.(fn1) This goal of uniform procedure, however, ran headlong into the emergent Erie doctrine.(fn2) One variant of the doctrine required federal courts exercising diversity of citizenship jurisdiction to apply state rather than federal law if its application would change the outcome of the case.(fn3) Recognizing a conflict between the goals of uniform federal procedure and of uniform outcome in state and federal forums, the Supreme Court in Hanna v. Plumer(fn4) removed the Federal Rules from the purview of the Erie doctrine and announced a separate standard more solicitous of federal procedural uniformity.(fn5) The Hanna Court, however, confounded lower courts and legal scholars by failing to overrule Ragan v. Merchants Transfer and Warehouse Co.,(fn6) decided under the Erie doctrine and in apparent conflict with the Court's new perspective on the Federal Rules. Legal commentators debated Ragan's continued vitality,(fn7) lower courts split,(fn8) and both groups pleaded for Supreme Court guidance.(fn9)
The Supreme Court answered their pleas in Walker v. Armco Steel Corp.,(fn10) where the Court, relying on Ragan,(fn11) held that state commencement provisions,(fn12) rather than the Federal Rule,(fn13) toll state statutes of limitations in diversity of citizenship cases. The Court justified its affirmation of Ragan and use of the state provision by characterizing Federal Rule 3 as "not broad enough" to control the tolling issue.(fn14) The Court employed an Erie doctrine analysis,(fn15) finding no direct federal-state law conflict as required for application of the Hanna analysis.(fn16) The Walker Court's version of the direct conflict test, however, invites overly literal interpretations of the Federal Rules and disuniformity in federal procedure. The Court's reliance on Ragan, clearly the product of earlier judicial theories no longer prevalent, will also confuse rather than clarify the already perplexing Federal Rules jurisprudence. The unfortunate result of Walker may be an unpredictable hybridization of federal and state procedure in federal diversity cases.
This article evaluates the Walker case in the context of Erie doctrine cases preceding it, and of later federal cases attempting to follow it. First, this article examines the facts and reasoning in Walker. Next, the article reviews the case law leading up to Walker, and then focuses on the flaws in the Walker analysis. After critically evaluating Walker, the article examines a Ninth Circuit decision interpreting Walker. Last, this article suggests that lower courts narrowly interpret Walker, restricting its scope to cases involving Federal Rule 3.
II. Walker v. Armco Steel Corp.
The factual circumstances in Walker are nearly identical to those in Ragan.(fn17) A nail fragment hit Walker in the eye on August 22, 1975.(fn18) Walker filed his complaint in federal district court(fn19) on August 19, 1977, three days before the two-year state statute of limitations would have expired. Summons issued the next day, but process was not served until December 1, 1977.(fn20) The district court dismissed the complaint on the authority of Ragan, holding that an Oklahoma statute requiring service of process to commence an action(fn21) was an integral part of the state's limitations statute.(fn22) The court reasoned that because it was part of the state's substantive law, the state commencement statute had to be applied. Feeling constrained by Ragan, the Tenth Circuit reluctantly agreed.(fn23)
The United States Supreme Court affirmed, holding that Ragan(fn24) is still good law, and that in diversity actions Rule 3 does not toll the state statute of limitations.(fn25) The Court used a two-part analysis. First, the Court found that the plain meaning of Rule 3, which simply states that an action is commenced when the complaint is filed,(fn26) indicated that it was not broad enough to govern the tolling issue.(fn27) To demonstrate the narrow sphere of Rule 3, the Court pointed out that its author, the Advisory Committee, raised but never answered the question of whether filing a complaint under Rule 3 also tolls the state statute of limitations.(fn28)
Second, the Court relied on a variant of the Erie doctrine(fn29) taken from Ragan, the integral part test.(fn30) Concluding that the state commencement provision was an integral part of the substantive policies underlying the state statute of limitations,(fn31) the Court adhered to Ragan(fn32) and applied the state statute.(fn33) The Walker Court concluded that absent a controlling Federal Rule, a diversity action that would have been barred in state court by the limitations statute should not be allowed to proceed in federal court "solely because of the fortuity that there is diversity of citizenship between the litigants."(fn34)
III. Erie And The Federal Rules
Walker has its philosophical roots in the 1938 landmark case of Erie Railroad v. Tompkins,(fn35) referred to in a later Supreme Court decision as "one of the modern cornerstones of our federalism."(fn36) Erie overruled Swift v. Tyson,(fn37) a case that had interpreted the Rules of Decision Act(fn38) as requiring application of only statutory and not state decisional law in federal diversity cases. Discrimination in favor of non-citizens able to "forum-shop" between the federal and state courts,(fn39) as well as constitutional considerations of federalism,(fn40) prompted the Erie Court to rule that federal diversity courts must apply the substantive decisional as well as the substantive statutory law of the forum state.(fn41) Federal diversity courts could continue, however, to apply federal procedural law,(fn42) namely, the Federal Rules of Civil Procedure enacted the same year.
The Supreme Court adopted the Federal Rules of Civil Procedure in order to bring predictability and uniformity to federal practice.(fn43) Believing the Federal Rules to be the quintessence of procedure and therefore firmly fixed on the procedural side of the Erie substance-procedure dichotomy,(fn44) the Court may not have foreseen the possibility of the Erie doctrine and the Rules clashing over matters classifiable as either substance or procedure.(fn45) That the Court considered the Federal Rules to be presumptively procedural is supported by language in the Rules Enabling Act. The Rules Enabling Act, the legislation authorizing the Federal Rules, provides that the Rules shall not "abridge, enlarge, or modify substantive rights of any litigant."(fn46) Had the Court regarded this language as the appropriate standard by which to judge the Federal Rules, requiring, in each case, an examination of the Rule and a search for substantive policy underlying its state counterpart, the Rules Enabling Act would have been a "thoroughly self-defeating piece of legislation."(fn47) A more reasonable conclusion is that the Court took note of the Act's limiting language and determined the Federal Rules to be federal procedural law, that, under the Erie doctrine,(fn48) need not give way to conflicting state procedural law.(fn49) Accordingly, in its first major decision interpreting the Rules, Sibbach v. Wilson and Co.,(fn50) the Court rejected the Rules Enabling Act proviso as the standard for judging the Federal Rules, adopting the more liberal standard of whether the Rule "really regulates procedure."(fn51)
Although the Federal Rules are by definition procedural and the Erie doctrine(fn52) requires application of only substantive state law, the integrity of the new procedural system was jeopardized by two decisions rendered in the 1940's that vastly expanded the reach of the Erie doctrine. In Guaranty Trust Co. v. York,(fn53) the Court enunciated the "outcome determinative" test for resolving state-federal conflicts of law. Under this later rendition of the Erie doctrine, a federal diversity court is required to apply state law, procedural or substantive, if its use in place of federal law would change the result in a particular case.(fn54)
Guided by the York outcome determinative test, the Court in Ragan v. Merchants Transfer and Warehouse Co.(fn55) concluded that the use of Rule 3(fn56) as a tolling provision would have varied the outcome. Therefore, Rule 3 and its uniform application in federal courts must yield to the state commencement law.(fn57)Subordinate to the Ragan Court's York outcome determinative rationale(fn58) was an additional theory derived from the lower court opinion,(fn59) the integral part test. The Court applied the state service provision, reasoning that it was an integral part of the state limitations statute,(fn60) considered substantive law under York,(fn61) and therefore binding on federal diversity courts under the Erie substance-procedure analysis.(fn62) In cases involving both
the Erie doctrine and the Federal Rules, the Court seemed to be favoring the Erie doctrine, and the Federal Rules were rapidly losing ground.(fn63)
Sixteen years later, though, in Hanna v. Plumer,(fn64) the Court removed the Federal Rules from the jurisdiction of the Erie doctrine, announcing a new three-part analysis to judge their validity.(fn65) First...
