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U.S. Supreme Court

Burlington Northern v. Woods, 480 U.S. 1 (1986)

Burlington Northern Railroad Co. v. Woods

No. 85-1088

Argued Nov. 4, 1986

Decided Feb. 24, 1987

480 U.S. 1


An Alabama statute requires an appellate court, upon affirming a money judgment without substantial modification, to impose a 10% penalty on any appellant who had obtained a stay of that judgment by executing a bond. The statute's purposes are to penalize frivolous appeals and those interposed for delay, and to provide appellees with additional compensation for having to suffer the ordeal of appeal. Upon affirming without modification a judgment for respondents in their federal diversity action arising from a motorcycle accident, the Eleventh Circuit imposed the Alabama statute's penalty on petitioner, which had posted bond to stay the judgment pending appeal.

Held: The Alabama mandatory affirmance penalty statute has no application to judgments entered by federal courts sitting in diversity. Pp. 480 U. S. 3-8.

(a) Rule 38 of the Federal Rules of Appellate Procedure affords federal courts of appeals plenary discretion to award damages to an appellee upon determining that the appeal is frivolous. Federal Rule 38's discretionary mode of operation conflicts with the Alabama statute's mandatory operation. Furthermore, the purposes underlying Rule 38 -- to penalize frivolous appeals and to compensate injured appellees for the delay and added expense inherent therein -- are sufficiently coextensive with the statute's purposes to indicate that the Rule occupies the statute's field of operation. The fact that Alabama has a similar Appellate chanrobles.com-red

Page 480 U. S. 2

Rule coexisting with the statute does not mean that a federal court could impose the mandatory statutory penalty while remaining free to exercise its Federal Rule 38 discretionary authority, since the statute would improperly limit the exercise of that discretion in instances in which the court wished to impose a penalty of less than 10%. Pp. 480 U. S. 4-8.

(b) Rule 38 must be applied under the analysis set forth in Hanna v. Plumer, 380 U. S. 460, since (a) it is a constitutional exercise of rulemaking authority in that it regulates matters that can reasonably be classified as procedural, and (b) it affects only the process of enforcing litigants' rights, and not the rights themselves, and therefore does not violate the Rule Enabling Act's prohibition against affecting substantive rights (28 U.S.C. §2072). P. 480 U. S. 8.


MARSHALL, J., delivered the opinion for a unanimous Court.


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