Guaranty Trust Co. v. York
Facts: Plaintiff and Defendant enacted certain transactions in 1931.
Procedural History: Plaintiff filed a diversity suit in 1942 for fraud in regard to the transactions. Ct. of appeals ruled that federal laches doctrine should be applied instead of the NY state statute of limitations.
Issue: Whether, when no recovery could be had in a State court because the action is barred by the statute of limitations, a federal court in equity can take cognizance of the suit because there is diversity of citizenship.
Holding: State law must apply
Reasons: The district ct. is set up as a different tribunal, not a different body of law. The statute of limitations has more than just a formal or negligible effect on the outcome. The "outcome determinative test" says that a federal court can apply its own rules if the outcome is substantively the same. There is no strict difference between substantive and procedural law. (The dissent argued that there is procedural and substantive law, and they should be differentiated.)