Guaranty Trust Co. v. York

326 U.S. 99 (1945)

Yeazell, pp. 276-278


Facts: The plaintiffs sued for some stuff.  The defendant countered by claiming that the New York statute of limitations barred the plaintiffs’ suit.  The plaintiffs claimed that the New York statute of limitations did not apply under Erie because their claim was in equity rather than in law.  The Second Circuit found that the plaintiffs were right and that their suit could proceed.  The defendant appealed to the Supreme Court.


Issue: Can the federal courts hear the suit even though it would be barred if it took place in state court between non-diverse parties?


Rule: NEW RULE, AGAIN!  The outcome of the case in federal court should be the same as it would be in state court.


Analysis: The Court looks to the intent of the ruling in Erie and asserts that it doesn’t matter whether state law is substantive or procedural as long as it will have an impact on the outcome of a case.


Conclusion: The judgment was reversed and the case was remanded, presumably to be dismissed by application of the New York statute of limitations.


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