Guaranty sued York in a
Federal Court in New York. York moved to have the case dismissed.
York argued that Guaranty's
claim was too late according to the New York Statute of Limitations.
Guaranty argued that the Statute
of Limitations is a procedural
law, not a substantive law, and therefore was not within the doctrine
established in Erie Railroad Co. v. Tompkins (304 U.S. 64
(1938)). Therefore, New York's Statute of Limitations did not apply.
aka the Erie Doctrine.
The US Supreme Court found for
York and dismissed the case.
The US Supreme Court took
the occasion replace with the substantive/procedural distinction that
they came up with in Erie.
The Court created a new
standard that said that regardless of whether the case was argued in
State or Federal court, the outcome should be substantially the same.
That's known as the outcome
determinative test for deciding
whether a piece of State law must be obeyed in Federal Courts.
In this case, the Court
found that the New York Statute of Limitations should be obeyed.