Semtek Intern. Inc. v. Lockheed Martin
                          121 S.Ct. 1021
                 Decided Feb. 27, 2001.

 Justice SCALIA delivered the opinion of the Court.
 This case presents the question whether the claim-preclusive effect of a federal
 judgment dismissing a diversity action on statute-of-limitations grounds is
 determined by the law of the State in which the federal court sits.
 Petitioner filed a complaint against respondent in California state court, alleging
 inducement of breach of contract and various business torts. Respondent removed
 the case to the United States District Court for the Central District of California on
 the basis of diversity of citizenship, see 28 U.S.C. 1332, 1441 (1994 ed. and
 Supp. IV), and successfully moved to dismiss petitioner's claims as barred by
 California's 2-year statute of limitations. In its order of dismissal, the District Court,
 adopting language suggested by respondent, dismissed petitioner's claims "in [their]
 entirety on the merits and with prejudice." App. to Pet. for Cert. 59a. Without
 contesting the District Court's designation of its dismissal as "on the merits,"
 petitioner appealed to the Court of Appeals for the Ninth Circuit, which affirmed
 the District Court's order. 168 F.3d 501 (1999) (table). Petitioner also brought
 suit against respondent in the State Circuit Court for Baltimore City, Maryland,
 alleging the same causes of action, which were not time barred under Maryland's
 3-year statute of limitations. Respondent sought injunctive relief against
 this action from the California federal court under the All Writs Act, 28 U.S.C.
 1651, and removed the action to the United States District Court for the
 District of Maryland on federal-question grounds (diversity grounds were not
 available because Lockheed "is a Maryland citizen," Semtek Int'l, Inc. v.
 Lockheed Martin Corp., 988 F.Supp. 913, 914 (1997)). The California federal
 court denied the relief requested, and the Maryland federal court remanded the
 case to state court because the federal question arose only by way of defense,
 ibid. Following a hearing, the Maryland state court granted respondent's motion to
 dismiss on the ground of res judicata. Petitioner then returned to the California
 federal court and the Ninth Circuit, unsuccessfully moving both courts to amend
 the former's earlier order so as to indicate that the dismissal was not "on the
 merits." Petitioner also appealed the Maryland trial court's order of dismissal to the
 Maryland Court of Special Appeals. The Court of Special Appeals affirmed,
 holding that, regardless of whether California would have accorded
 claim-preclusive effect to a statute-of-limitations dismissal by one of its own courts,
 the dismissal by the California federal court barred the complaint filed in Maryland,
 since the res judicata effect of federal diversity judgments is prescribed by federal
 law, under which the earlier dismissal was on the merits and claim preclusive. 128
 Md.App. 39, 736 A.2d 1104 (1999). After the Maryland Court of Appeals
 declined to review the case, we granted certiorari. 530 U.S. 1260, 120 S.Ct.
 2715, 147 L.Ed.2d 981 (2000).


 Petitioner contends that the outcome of this case is controlled by Dupasseur v.
 Rochereau, 21 Wall. 130, 135, 22 L.Ed. 588 (1875)...

[Discussion omitted - Petitioner's argument is rejected.]

 Respondent, for its part, contends that the outcome of this case is controlled by
 Federal Rule of Civil Procedure 41(b), which provides as follows:

 "Involuntary Dismissal: Effect Thereof. For failure of the plaintiff to prosecute or to
 comply with these rules or any order of court, a defendant may move for dismissal
 of an action or of any claim against the defendant. Unless the court in its order for
 dismissal otherwise specifies, a dismissal under this subdivision and any dismissal
 not provided for in this rule, other than a dismissal for lack of jurisdiction, for
 improper venue, or for failure to join a party under Rule 19, operates as an
 adjudication upon the merits."

[Discussion omitted. The Court offers the following reading of Rule 41(b), under which it does not answer the questioin faced by the Court:]

We think, then, that the effect of the "adjudication upon the merits" default
 provision of Rule 41(b)--and, presumably, of the explicit order in the present case
 that used the language of that default provision--is simply that, unlike a dismissal
 "without prejudice," the dismissal in the present case barred refiling of the same
 claim in the United States District Court for the Central District of California. That
 is undoubtedly a necessary condition, but it is not a sufficient one, for
 claim-preclusive effect in other courts.2

 Having concluded that the claim-preclusive effect, in Maryland, of this California
 federal diversity judgment is dictated neither by Dupasseur v. Rochereau, as
 petitioner contends, nor by Rule 41(b), as respondent contends, we turn to
 consideration of what determines the issue. Neither the Full Faith and Credit
 Clause, U.S. Const., Art. IV, 1,3 nor the full faith and credit statute, 28
 U.S.C. 1738,4 addresses the question. By their terms they govern
 the effects to be given only to state-court judgments (and, in the case of the statute,
 to judgments by courts of territories and possessions). And no other federal textual
 provision, neither of the Constitution nor of any statute, addresses the
 claim-preclusive effect of a judgment in a federal diversity action.

It is also true, however, that no federal textual provision addresses
 the claim-preclusive effect of a federal-court judgment in a federal- question case,
 yet we have long held that States cannot give those judgments merely whatever
 effect they would give their own judgments, but must accord them the effect that
 this Court prescribes. See Stoll v. Gottlieb, 305 U.S. 165, 171-172, 59 S.Ct.
 134, 83 L.Ed. 104 (1938); Gunter v. Atlantic Coast Line R. Co., 200 U.S.
 273, 290-291, 26 S.Ct. 252, 50 L.Ed. 477 (1906); Deposit Bank v.
 Frankfort, 191 U.S. 499, 514-515, 24 S.Ct. 154, 48 L.Ed. 276 (1903). The
 reasoning of that line of cases suggests, moreover, that even when States are
 allowed to give federal judgments (notably, judgments in diversity cases) no more
 than the effect accorded to state judgments, that disposition is by direction of this
 Court, which has the last word on the claim-preclusive effect of all federal

 "It is true that for some purposes and within certain limits it is only required that the
 judgments of the courts of the United States shall be given the same force and
 effect as are given the judgments of the courts of the States wherein they are
 rendered; but it is equally true that whether a Federal judgment has been given due
 force and effect in the state court is a Federal question reviewable by this court,
 which will determine for itself whether such judgment has been given due weight or
 otherwise. ...

 "When is the state court obliged to give to Federal judgments only the force and
 effect it gives to state court judgments within its own jurisdiction? Such cases are
 distinctly pointed out in the opinion of Mr. Justice Bradley in Dupasseur v.
 Rochereau [which stated that the case was a diversity case, applying state law
 under state procedure]." Ibid.

 In other words, in Dupasseur the State was allowed (indeed, required) to give a
 federal diversity judgment no more effect than it would accord one of its own
 judgments only because reference to state law was the federal rule that this
 Court deemed appropriate. In short, federal common law governs the claim-
 preclusive effect of a dismissal by a federal court sitting in diversity. See generally
 R. Fallon, D. Meltzer, & D. Shapiro, Hart and Wechsler's The Federal Courts and
 the Federal System 1473 (4th ed.1996); Degnan, Federalized Res Judicata, 85
 Yale L.J. 741 (1976).

 It is left to us, then, to determine the appropriate federal rule. And despite
 the sea change that has occurred in the background law since Dupasseur was
 decided--not only repeal of the Conformity Act but also the watershed decision of
 this Court in Erie--we think the result decreed by Dupasseur continues to be
 correct for diversity cases. Since state, rather than federal, substantive law is at
 issue there is no need for a uniform federal rule. And indeed, nationwide uniformity
 in the substance of the matter is better served by having the same claim-preclusive
 rule (the state rule) apply whether the dismissal has been ordered by a state or a
 federal court. This is, it seems to us, a classic case for adopting, as the federally
 prescribed rule of decision, the law that would be applied by state courts in the
 State in which the federal diversity court sits. See Gasperini v. Center for
 Humanities, Inc., 518 U.S. 415, 429-431, 116 S.Ct. 2211, 135 L.Ed.2d 659
 (1996); Walker v. Armco Steel Corp., 446 U.S., at 752-753, 100 S.Ct. 1978;
 Bernhardt v. Polygraphic Co. of America, 350 U.S. 198, 202-205, 76 S.Ct.
 273, 100 L.Ed. 199 (1956); Palmer v. Hoffman, 318 U.S. 109, 117, 63 S.Ct.
 477, 87 L.Ed. 645 (1943); Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S.
 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Cities Service Oil Co. v.
 Dunlap, 308 U.S. 208, 212, 60 S.Ct. 201, 84 L.Ed. 196 (1939). As we have
 alluded to above, any other rule would produce the sort of "forum-shopping ... and
 ... inequitable administration of the laws" that Erie seeks to avoid, Hanna,
 380 U.S., at 468, 85 S.Ct. 1136, since filing in, or removing to, federal court
 would be encouraged by the divergent effects that the litigants would anticipate
 from likely grounds of dismissal. See Guaranty Trust Co. v. York, 326 U.S., at
 109-110, 65 S.Ct. 1464.

 This federal reference to state law will not obtain, of course, in situations in which
 the state law is incompatible with federal interests. If, for example, state law did
 not accord claim-preclusive effect to dismissals for willful violation of
 discovery orders, federal courts' interest in the integrity of their own processes
 might justify a contrary federal rule. No such conflict with potential federal interests
 exists in the present case. Dismissal of this state cause of action was decreed by
 the California federal court only because the California statute of limitations so
 required; and there is no conceivable federal interest in giving that time bar more
 effect in other courts than the California courts themselves would impose.
 Because the claim-preclusive effect of the California federal court's
 dismissal "upon the merits" of petitioner's action on statute-of- limitations grounds
 is governed by a federal rule that in turn incorporates California's law of claim
 preclusion (the content of which we do not pass upon today), the Maryland Court
 of Special Appeals erred in holding that the dismissal necessarily precluded the
 bringing of this action in the Maryland courts. The judgment is reversed, and the
 case remanded for further proceedings not inconsistent with this opinion.
 It is so ordered.

2. We do not decide whether, in a diversity case, a federal court's
      "dismissal upon the merits" (in the sense we have described), under
      circumstances where a state court would decree only a "dismissal
      without prejudice," abridges a "substantive right" and thus exceeds
      the authorization of the Rules Enabling Act. We think the situation will
      present itself more rarely than would the arguable violation of the Act
      that would ensue from interpreting Rule 41(b) as a rule of claim
      preclusion; and if it is a violation, can be more easily dealt with on
      direct appeal.

3. Article IV, 1, provides as follows:
      "Full Faith and Credit shall be given in each State to the public Acts,
      Records, and judicial Proceedings of every other State. And the
      Congress may by general Laws prescribe the Manner in which such
      Acts, Records and Proceedings shall be proved, and the Effect

4. Title 28 U.S.C. 1738 provides in relevant part as follows:
      "The records and judicial proceedings of any court of any ... State,
      Territory or Possession ... shall have the same full faith and credit in
      every court within the United States and its Territories and
      Possessions as they have by law or usage in the courts of such State,
      Territory or Possession from which they are taken."