486 U.S. 717 (1988)
In the 1960s and 1970s, Sun Oil Company, a Delaware corporation with its principal place of business in Texas, extracted natural gas from properties leased from respondents in Texas, Oklahoma, and Louisiana.1 The leases entitled respondents to a royalty share, typically one-eighth of the proceeds from gas sales.2 Sun Oil sold the gas in interstate commerce subject to Federal Power Commission price approvals.3 The company collected proposed price increases from customers pending final FPC approval while filing undertakings to refund any unapproved amounts plus interest at rates specified in federal regulations.4
After FPC approvals, Sun Oil made suspended royalty payments to respondents totaling $1,167,000 in July 1976 covering 670 properties.5 Sun Oil also made suspended royalty payments totaling $2,676,000 in April 1978 covering 690 properties.6 In August 1979, respondents Richard Wortman and Hazel Moore filed a class action in Kansas state court on behalf of all affected royalty owners, seeking interest on the suspended payments for the periods they were held by Sun Oil.7
The Kansas trial court applied Kansas law to all claims, including those involving out-of-state leases and residents, and awarded prejudgment interest at the FPC regulatory rates.8 This ruling followed precedents from related litigation involving Phillips Petroleum.9 The Kansas Supreme Court initially affirmed, but the United States Supreme Court vacated and remanded after deciding Phillips Petroleum Co. v. Shutts, which limited Kansas's ability to apply its substantive law to claims involving nonresidents and out-of-state properties.10
On remand, the trial court determined that the laws of Texas, Oklahoma, and Louisiana were consistent with Kansas law on interest liability and rates, and that Kansas's five-year statute of limitations permitted claims based on the 1976 payments.11 The Kansas Supreme Court affirmed these conclusions in Wortman III, holding that the Shutts decision affected only substantive law and not procedural matters such as statutes of limitations.12
Whether the Full Faith and Credit Clause or the Due Process Clause prohibits a forum state from applying its own statute of limitations to claims governed in substance by the law of another state?13
The Full Faith and Credit Clause does not compel a state to substitute the statutes of other states for its own statutes dealing with a subject matter concerning which it is competent to legislate.14 A statute of limitations is a procedural matter within the forum state's legislative jurisdiction under both the Full Faith and Credit Clause and the Due Process Clause.15
No. Kansas applied its own five-year statute of limitations to permit claims for interest on suspended royalty payments made in July 1976, even though the substantive law of Texas, Oklahoma, and Louisiana governed those claims after the remand in light of Shutts III.16 The historical record at the time of the Constitution's adoption shows that statutes of limitations were treated as procedural restrictions fashioned by each jurisdiction for its own courts.17 This practice has remained unchallenged under the Full Faith and Credit Clause.18 Kansas possessed a legitimate interest in regulating the workload of its courts and determining when a claim is too stale to be adjudicated.19
Sun Oil could not claim unfair surprise from application of a rule as old as the Republic.20
Kansas's application of its own statute of limitations did not violate the Full Faith and Credit Clause or the Due Process Clause.21
Related opinions on this issue
Joined by Justice Marshall And Justice Blackmun
Justice Brennan concurred in the judgment on the statute of limitations issue but reached the result through a different path.22 He applied the significant contacts test from Phillips Petroleum and Allstate.23 He concluded that a forum state's contacts from its status as the forum create sufficient procedural interests. This makes application of its limitations period to out-of-state claims consistent with the Full Faith and Credit Clause, whether the period is longer or shorter than that of the claim state.
He rejected the majority's reliance on tradition alone and warned that the Court's approach would cause mischief by avoiding examination of relevant state interests.24
Whether the Kansas Supreme Court's interpretations of Texas, Oklahoma, and Louisiana law on liability for and rates of interest on suspended royalty payments violated the Full Faith and Credit Clause or the Due Process Clause?25
To constitute a violation of the Full Faith and Credit Clause or the Due Process Clause, it is not enough that a state court misconstrue the law of another State. Rather, the misconstruction must contradict law of the other State that is clearly established and that has been brought to the court's attention.26
No. The Kansas Supreme Court interpreted Texas, Oklahoma, and Louisiana law to impose liability for interest at the FPC regulatory rates on the basis of an implied agreement arising from Sun Oil's corporate undertaking with the FPC.27 Petitioner Sun Oil brought to the Kansas court's attention no decision from Texas, Oklahoma, or Louisiana clearly establishing that an agreement to pay interest at a specified rate would not be implied in these circumstances or that the statutory rates of six or seven percent must apply instead.28 The Kansas interpretations therefore did not contradict clearly established law of the other states.29
The Kansas Supreme Court's interpretations of Texas, Oklahoma, and Louisiana law did not violate the Full Faith and Credit Clause or the Due Process Clause.30
Related opinions on this issue
Joined by The Chief Justice
Justice O'Connor joined the majority on the statute of limitations issue but dissented on the interest-rate issue.31 She concluded that the Kansas court violated the Full Faith and Credit Clause by applying the FPC rates instead of the statutory rates clearly established in Texas, Oklahoma, and Louisiana.32 In her view, the Kansas court offered no colorable support for its conclusion that each of those states would imply an agreement to adopt the FPC rates, and the majority's affirmance converted the constitutional guarantee into a precatory admonition.33