author: Justice Scalia Justice Souter,

text:
    JINKS v. RICHLAND COUNTY, SOUTH CAROLINA, et al.
    No. 02-258.
    Argued March 5, 2003
    Decided April 22, 2003

      Scalia, J., delivered the opinion for a unanimous court. Souter, J., filed a concurring opinion, post, p. 467.

      Robert S. Peck argued the cause for petitioner. With him on the briefs were James Mixon Griffin and Bradford P. Simpson.

      Jeffrey A. Lamken argued the cause for the United States as intervenor. On the. briefs were Solicitor General Olson, Assistant Attorney General McCollum, Deputy Solicitor General Clement, Malcolm L. Stewart, Mark B. Stern, and Alisa B. Klein.

      Andrew F. Lindemann argued the cause for respondent Richland County. With him on the brief were William H. Davidson II and David L. Morrison.

         Barbara Amwine and Thomas J. Henderson filed a brief for the Lawyers’ Committee for Civil Rights Under Law as amicus curiae urging reversal.
      Briefs of amici curiae urging affirmance were filed for the State of Alabama et al. by William H. Pryor, Jr., Attorney General of Alabama, Nathan A Forrester, Solicitor General, Carter G. Phillips, and Gene C. Schaerr, and by the Attorneys General for their respective States as follows: Ken Salazar of Colorado, M. Jane Brady of Delaware, Thurbert E. Baker of Georgia, Mark J. Bennett of Hawaii, Steve Carter of Indiana, Thomas J. Miller of Iowa, Carla J. Stovall of Kansas, Mike Moore of Mississippi, Jeremiah TV (Jay) Nixon of Missouri, David Samson of New Jersey, Wayne Stenehjem of North Dakota, W. A. Drew Edmondson of Oklahoma, Charlie Condon of South Carolina, Paul G. Summers of Tennessee, Greg Abbott of Texas, Mark L. Shurtleff of Utah, and Jerry TV Kilgore of Virginia; and for the Council of State Governments et al. by Richard Ruda and James I. Crowley.

   Justice Scalia

delivered the opinion of the Court.

The Supreme Court of South Carolina dismissed petitioner’s lawsuit against Richland County (hereinafter respondent) as time barred. In doing so it held that 28 U. S. C. § 1367(d), which required the state statute of limitations to be tolled for the period during which petitioner’s cause of action had previously been pending in federal court, is unconstitutional as applied to lawsuits brought against a State’s political subdivisions. The issue before us is the validity of that constitutional determination.

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When a federal district court has original jurisdiction over a civil cause of action, § 1867 determines whether it may exercise supplemental jurisdiction over other claims that do not independently come within its jurisdiction, but that form part of the same Article III “ease or controversy.” Section 1367(a) provides:

“Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.”

As the introductory clause suggests, not every claim within the same “case or controversy” as the claim within the federal courts’ original jurisdiction will be decided by the federal court; §§ 1367(b) and (c) describe situations in which a federal court may or must decline to exercise supplemental jurisdiction. Section 1367(c), for example, states:

“The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if—
“(1) the claim raises a novel or complex issue of State law,
“(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
“(3) the district court has dismissed all claims over which it has original jurisdiction, or
“(4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.”

Thus, some claims asserted under § 1367(a) will be dismissed because the district court declines to exercise jurisdiction over them and, if they are to be pursued, must be refiled in state court. To prevent the limitations period on such supplemental claims from expiring while the plaintiff was fruitlessly pursuing them in federal court, § 1367(d) provides a tolling rule that must be applied by state courts:

“The period of limitations for any claim asserted under subsection (a), and for any other claim in the same action that is voluntarily dismissed at the same time as or after the dismissal of the claim under subsection (a), shall be tolled while the claim is pending and for a period of 30 days after it is dismissed unless State law provides for a longer tolling period.”

B

On October 14,1994, Carl H. Jinks was arrested and jailed for failure to pay child support. Four days later, while confined at respondent’s detention center, he died of complications associated with alcohol withdrawal. In 1996, within the applicable statute of limitations, petitioner Susan Jinks, Carl Jinks’s widow, brought an action in the United States District Court for the District of South Carolina against respondent, its detention center director, and its detention center physician. She asserted a cause of action under Rev. Stat. § 1979, 42 U. S. C. § 1983, and also supplemental claims for wrongful death and survival under the South Carolina Tort Claims Act. See S. C. Code Ann. §15-78-10 et seq. (West Supp. 2002). On November 20, 1997, the District Court granted the defendants’ motion for summary judgment on the § 1983 claim, and two weeks later issued an order declining to exercise jurisdiction over the remaining state-law claims, dismissing them without prejudice pursuant to 28 U. S. C. § 1367(c)(3).

On December 18,1997, petitioner filed her wrongful-death and survival claims in state court. After the jury returned a verdict of $80,000 against respondent on the wrongful-death claim, respondent appealed to the South Carolina Supreme Court, which reversed on the ground that petitioner’s state-law claims were time barred. Although they would not have been time barred under § 1367(d)’s tolling rule, the State Supreme Court held that § 1367(d) was unconstitutional as applied to claims brought in state court against a State’s political subdivisions, because it “interferes with the State’s sovereign authority to establish the extent to which its political subdivisions are subject to suit.” 349 S. C. 298, 304, 563 S. E. 2d 104, 107 (2002).

We granted certiorari, 537 U. S. 972 (2002).

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Respondent and its amici first contend that § 1367(d) is facially invalid because it exceeds the enumerated powers of Congress. We disagree. Although the Constitution does not expressly empower Congress to toll limitations periods for state-law claims brought in state court, it does give Congress the authority “[t]o make all Laws which shall be necessary and proper for carrying into Execution [Congress’s Article I, §8,] Powers and all other Powers vested by this Constitution in the Government of the United States . . . .” Art. I,. §8, cl. 18. The enactment of § 1367(d) was not the first time Congress prescribed the alteration of a state-law limitations period; nor is this the first case in which we have ruled on its authority to do so. In Stewart v. Kahn, 11 Wall. 493 (1871), we upheld as constitutional a federal statute that tolled limitations periods for state-law civil and criminal cases for the time during which actions could not be prosecuted because of the Civil War. We reasoned that this law was both necessary and proper to carrying into effect the Federal Government’s war powers, because it “remedied] the evils” that had arisen from the war. “It would be a strange result if those in rebellion, by protracting the conflict, could thus rid themselves of their debts, and Congress, which had the power to wage war and suppress the insurrection, had no power to remedy such an evil, which is one of its consequences.” Id., at 507.

Of course § 1367(d) has nothing to do with the war power. We agree with petitioner and intervenor United States, however, that § 1367(d) is necessary and proper for carrying into execution Congress’s power “[t]o constitute Tribunals inferior to the supreme Court,” U. S. Const., Art. I, § 8, cl. 9, and to assure that those tribunals may fairly and efficiently exercise “[t]he judicial Power of the United States,” Art. III, §1. As to “necessity”: The federal courts can assuredly exist and function in the absence of § 1367(d), but we long ago rejected the view that the Necessary and Proper Clause demands that an Act of Congress be “‘absolutely necessary’ ” to the exercise of an enumerated power. See McCulloch v. Maryland, 4 Wheat. 316, 414-415 (1819). Rather, it suffices that § 1367(d) is “conducive to the due administration of justice” in federal court, and is “plainly adapted” to that end, id., at 417, 421. Section 1367(d) is conducive to the administration of justice because it provides an alternative to the unsatisfactory options that federal judges faced when they decided whether to retain jurisdiction over supplemental state-law claims that might be time barred in state court. In the pre-§ 1367(d) world, they had three basic choices: First, they could condition dismissal of the state-law claim on the defendant’s waiver of any statute-of-limitations defense in state court. See, e. g., Duckworth v. Franzen, 780 F. 2d 645, 657 (CA7 1985); Financial General Bankshares, Inc. v. Metzger, 680 F. 2d 768, 778 (CADC 1982). That waiver could be refused, however, in which case one of the remaining two choices would have to be pursued. Second, they could retain jurisdiction over the state-law claim even though it would more appropriately be heard in state court. See Newman v. Burgin, 930 F. 2d 955, 963-964 (CA1 1991) (collecting cases). That would produce an obvious frustration of statutory policy. And third, they could dismiss the state-law claim but allow the plaintiff to reopen the federal case if the state court later held the claim to be time barred. See, e. g., Rheaume v. Texas Dept. of Public Safety, 666 F. 2d 925, 932 (CA5 1982). That was obviously inefficient. By providing a straightforward tolling rule in place of this regime, § 1367(d) unquestionably promotes fair and efficient operation of the federal courts and is therefore conducive to the administration of justice.

And it is conducive to the administration of justice for another reason: It eliminates a serious impediment to access to the federal courts on the part of plaintiffs pursuing federal- and state-law claims that “derive from a common nucleus of operative fact,” Mine Workers v. Gibbs, 383 U. S. 715, 725 (1966). Prior to enactment of § 1367(d), they had the following unattractive options: (1) They could file a single federal-court action, which would rim the risk that the federal court would dismiss the state-law claims after the limitations period had expired; (2) they could file a single state-law action, which would abandon their right to a federal forum; (3) they could file separate, timely actions in federal and state court and ask that the state-court litigation be stayed pending resolution of the federal case, which would increase litigation costs with no guarantee that the state court would oblige. Section 1367(d) replaces this selection of inadequate choices with the assurance that state-law claims asserted under § 1367(a) will not become time barred while pending in federal court.

We are also persuaded, and respondent does not deny, that § 1367(d) is “plainly adapted” to the power of Congress to establish the lower federal courts and provide for the fair and efficient exercise of their Article III powers. There is no suggestion by either of the parties that Congress enacted § 1367(d) as a “pretext” for “the accomplishment of objects not entrusted to the [federal] government,” McCulloch, supra, at 423, nor is the connection between § 1367(d) and Congress’s authority over the federal courts so attenuated as to undermine the enumeration of powers set forth in Article I, § 8, cf. United States v. Lopez, 514 U. S. 549, 567-568 (1995); United States v. Morrison, 529 U. S. 598, 615 (2000).

Respondent and its amici further contend, however, that § 1367(d) is not a “proper” exercise of Congress’s Article I powers because it violates principles of state sovereignty. See Printz v. United States, 521 U. S. 898, 923-924 (1997). Respondent views § 1367(d)’s tolling rule as a regulation of state-court “procedure,” and contends that Congress may not, consistent with the Constitution, prescribe procedural rules for state courts’ adjudication of purely state-law claims. See, e. g., Bellia, Federal Regulation of State Court Procedures, 110 Yale L. J. 947 (2001); Congressional Authority to Require State Courts to Use Certain Procedures in Products Liability Cases, 13 Op. Off. Legal Counsel 372, 373-374 (1989) (stating that “potential constitutional questions” arise when Congress “attempts to prescribe directly the state court procedures to be followed in products liability cases”). Assuming for the sake of argument that a principled dichotomy can be drawn, for purposes of determining whether an Act of Congress is “proper,” between federal laws that regulate state-court “procedure” and laws that change the “substance” of state-law rights of action, we do not think that state-law limitations periods fall into the category of “procedure” immune from congressional regulation. Respondent’s reliance on Sun Oil Co. v. Wortman, 486 U. S. 717 (1988), which held a state statute of limitations to be “procedural” for purposes of the Full Faith and Credit Clause, is misplaced. As we noted in that very case, the meaning of “‘substance’” and “‘procedure’” in a particular context is “largely determined by the purposes for which the dichotomy is drawn.” Id., at 726. For purposes of Erie R. Co. v. Tompkins, 304 U. S. 64 (1938), for example, statutes of limitations are treated as substantive. Guaranty Trust Co. v. York, 326 U. S. 99 (1945). Stewart v. Kahn, 11 Wall., at 506-507, provides ample support for the proposition that — if the substance-procedure dichotomy posited by respondent is valid — the tolling of limitations periods falls on the “substantive” side of the line. To sustain § 1367(d) in this case, we need not (and do not) hold that Congress has unlimited power to regulate practice and procedure in state courts.

We therefore reject respondent’s contention that § 1367(d) is facially unconstitutional.

B

Respondent next maintains that § 1367(d) should not be interpreted to apply to claims brought against a State’s political subdivisions. We find this contention also to be without merit.

The South Carolina Tort Claims Act, S. C. Code Ann. § 15-78-10 et seq. (West Supp. 2002), confers upon respondent an immunity from tort liability for any claim brought more than two years after the injury was or should have been discovered. In respondent’s view, § 1367(d)’s extension of the time period in which a State’s political subdivisions may be sued constitutes an impermissible abrogation of “sovereign immunity.” That is not so. Although we have held that Congress lacks authority under Article I to override a State’s immunity from suit in its own courts, see Alden v. Maine, 527 U. S. 706 (1999), it may subject a municipality to suit in state court if that is done pursuant to a valid exercise of its enumerated powers, see id., at 756. Section 1367(d) tolls the limitations period with respect to state-law causes of action brought against municipalities, but we see no reason why that represents a greater intrusion on “state sovereignty” than the undisputed power of Congress to override state-law immunity when subjecting a municipality to suit under a federal cause of action. In either case, a State’s authority to set the conditions upon which its political subdivisions are subject to suit in its own courts must yield to the enactments of Congress. This is not an encroachment on “state sovereignty,” but merely the consequence of those cases (which respondent does not ask us to overrule) which hold that municipalities, unlike States, do not enjoy a constitutionally protected immunity from suit.

Nor do we see any reason to construe § 1367(d) not to apply to claims brought against a State’s political subdivisions absent an “unmistakably clear” statement of the statute’s applicability to such claims. Although we held in Raygor v. Regents of Univ. of Minn., 534 U. S. 533 (2002), that § 1367(d) does not apply to claims filed in federal court against States but subsequently dismissed on sovereign immunity grounds, we did so to avoid interpreting the statute in a manner that would raise “serious constitutional doubt” in light of our decisions protecting a State’s sovereign immunity from congressional abrogation, id., at 543. As we have just explained, however, no such constitutional doubt arises from holding that petitioner’s claim against respondent — which is not a State, but a political subdivision of a State — falls under the definition of “any claim asserted under subsection (a).” § 1367(d) (emphasis added). In any event, the idea that an “unmistakably clear” statement is required before an Act of Congress may expose a local government to liability cannot possibly be reconciled with our holding in Monell v. New York City Dept. of Social Servs., 436 U. S. 658 (1978), that municipalities are subject to suit as “persons” under § 1983.

* * *

The judgment of the Supreme Court of South Carolina is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.

It is so ordered.

Justice Souter,

concurring.

In joining the Court today, I do not signal any change of opinion from my dissent in Alden v. Maine, 527 U. S. 706, 760 (1999).

       See, e. g., Soldiers’ and Sailors’ Civil Relief Act of 1940, 50 U. S. C. App. § 525 (“The period of military service shall not be included in computing any period now or hereafter to be limited by any law, regulation, or order for the bringing of any action or proceeding in any court... by or against any person in military service”); 42 U. S. C. § 9658(a)(1) (“In the case of any action brought under State law for personal injury, or property damages, which are caused or contributed to by exposure to any hazardous substance, or pollutant or contaminant, released into the environment from a facility, if the applicable limitations period for such action (as specified in the State statute of limitations or under common law) provides a commencement date which is earlier than the federally required commencement date, such period shall commence at the federally required commencement date in lieu of the date specified in such State statute”); 11 U. S. C. § 108(c) (“Except as provided in section 524 of this title, if applicable nonbankruptcy law .. . fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor... and such period has not expired before the date of the filing of the petition, then such period does not expire until the later of — (1) the end of such period, including any suspension of such period occurring on or after the commencement of the ease; or (2) 30 days after notice of the termination or expiration of the stay under section 362, 922,1201, or 1301 of this title, as the case may be, with respect to such claim”).

       This was Chief Justice Marshall’s description in McCulloch of why— by way of example — legislation punishing perjury in the federal courts is valid under the Necessary and Proper Clause. See 4 Wheat., at 417.


source: Caselaw Access Project

author: Justice Kennedy Justice Breyer,

license: Public Domain

text:
    DOLE FOOD CO. et al. v. PATRICKSON et al.
    No. 01-593.
    Argued January 22, 2003
    Decided April 22, 2003

      Kennedy, J., delivered the opinion for a unanimous Court with respect to Parts I, II-A, and II-C, and the opinion of the Court -with respect to Part II-B, in which Rehnquist, C. J., and Stevens, Scalia, Souter, Thomas, and Ginsburg, JJ., joined. Breyer, J., filed an opinion concurring in part and dissenting in part, in which O’Connor, J., joined, post, p. 480.

      Peter R. Poden argued the cause for petitioners in both cases. With him on the briefs in No. 01-594 were Philip E. Karmel, Laurence A. Horvath, Thomas C. Walsh, and James F. Bennett. On the briefs in No. 01-593 were Robert H. Klo-noff, Daniel H. Bromberg, Terence M. Murphy, Michael L. Rice, Robert G. Crow, Richard C. Sutton, Jr., Robert T. Greig, Boaz S. Morag, Michael L. Brem, F. Walter Conrad, Jr., D. Ferguson McNiel III, Charles W. Schwartz, and R. Burton Ballanfant.

      Jonathan S. Massey argued the cause for respondents in both cases. With him on the brief was Christian H. Hartley.

      Jeffrey P Minear argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Olson, Assistant Attorney General McCallum, Deputy Solicitor General Kneedler, Douglas N. Letter, H. Thomas Byron III, and William Howard Taft IV.

      Together with No. 01-594, Dead Sea Bromine Co., Ltd., et al. v. Patrickson et al., also on certiorari to the same court.

       Briefs of amici curiae urging reversal were filed for the Republic of Ireland et al. by Martin R. Baach and James P. Davenport; and for Consortium de Réalisation et al. by George J. Terwilliger III, Darryl S. Lew, and R. Shawn Gunnarson.

   Justice Kennedy

delivered the opinion of the Court.

Foreign states may invoke certain rights and immunities in litigation under the Foreign Sovereign Immunities Act of 1976 (FSIA or Act), Pub. L. 94-583, 90 Stat. 2891. Some of the Act’s provisions also may be invoked by a corporate entity that is an “instrumentality” of a foreign state as defined by the Act. Republic of Argentina v. Weltover, Inc., 504 U. S. 607, 611 (1992); Verlinden B. V. v. Central Bank of Nigeria, 461 U. S. 480, 488 (1983). The corporate entities in this action claim instrumentality status to invoke the Act’s provisions allowing removal of state-court actions to federal court. As the action comes to us, it presents two questions. The first is whether a corporate subsidiary can claim instrumentality status where the foreign state does not own a majority of its shares but does own a majority of the shares of a corporate parent one or more tiers above the subsidiary. The second question is whether a corporation’s instrumentality status is defined as of the time an alleged tort or other actionable wrong occurred or, on the other hand, at the time suit is filed. We granted certiorari, 536 U. S. 956 (2002).

I

The underlying action was filed in a state court in Hawaii in 1997 against Dole Food Company and other companies (Dole petitioners). Plaintiffs in the action were a group of farm workers from Costa Rica, Ecuador, Guatemala, and Panama who alleged injury from exposure to dibromochloro-propane, a chemical used as an agricultural pesticide in their home countries. The Dole petitioners impleaded petitioners Dead Sea Bromine Co., Ltd., and Bromine Compounds, Ltd. (collectively, the Dead Sea Companies). The merits of the suit are not before us.

The Dole petitioners removed the action to the United States District Court for the District of Hawaii under 28 U. S. C. § 1441(a), arguing that the federal common law of foreign relations provided federal-question jurisdiction under § 1331. The District Court agreed there was federal subject-matter jurisdiction under the federal common law of foreign relations but, nevertheless, dismissed the case on grounds oí forum non conveniens.

The Dead Sea Companies removed under a separate theory. They claimed to be instrumentalities of a foreign state as defined by the FSIA, entitling them to removal under § 1441(d). The District Court held that the Dead Sea Companies are not instrumentalities of a foreign state for purposes of the FSIA and are not entitled to removal on that basis. Civ. No. 97-01516HG (D. Haw., Sept. 9, 1998), App. to Pet. for Cert. in No. 01-594, p. 79a.

The Court of Appeals reversed. Addressing the ground relied on by the Dole petitioners, it held removal could not rest on the federal common law of foreign relations. 251 F. 3d 795, 800 (CA9 2001). In this Court the Dole petitioners did not seek review of that portion of the Court of Appeals’ ruling, and we do not address it. Accordingly, the writ of certiorari in No. 01-593 is dismissed.

The Court of Appeals also reversed the order allowing removal at the instance of the Dead Sea Companies, who alleged they were instrumentalities of the State of Israel. The Court of Appeals noted, but declined to answer, the question whether status as an instrumentality of a foreign state is assessed at the time of the alleged wrongdoing or at the time suit is filed. It went on to hold that the Dead Sea Companies, even at the earlier date, were not instrumentalities of Israel because they did not meet the Act’s definition of instrumentality.

In order to prevail here, the Dead Sea Companies must show both that instrumentality status is determined as of the time the alleged tort occurred and that they can claim instrumentality status even though they were but subsidiaries of a parent owned by the State of Israel. We address each question in turn. In No. 01-594, the case in which the Dead Sea Companies are petitioners, we now affirm.

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A

Title 28 U. S. C. § 1441(d) governs removal of actions against foreign states. It provides that “[a]ny civil action brought in a State court against a foreign state as defined in [28 U. S. C. § 1603(a)] may be removed by the foreign state to the district court of the United States for the district and division embracing the place where such action is pending.” See also §1330 (governing original jurisdiction). Section 1603(a), part of the FSIA, defines “foreign state” to include an “agency or instrumentality of a foreign state.” “[A]gency or instrumentality of a foreign state” is defined, in turn, as:

“[A]ny entity—
“(1) which is a separate legal person, corporate or otherwise, and
“(2) which is an organ of a foreign state or political subdivision thereof, or a majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof, and
“(3) which is neither a citizen of a State of the United States ... nor created under the laws of any third country.” § 1603(b).

B

The Court of Appeals resolved the question of the FSIA’s applicability by holding that a subsidiary of an instrumentality is not itself entitled to instrumentality status. Its holding was correct.

The State of Israel did not have direct ownership of shares in either of the Dead Sea Companies at any time pertinent to this suit. Rather, these companies were, at various times, separated from the State of Israel by one or more intermediate corporate tiers. For example, from 1984-1985, Israel wholly owned a company called Israeli Chemicals, Ltd.; which owned a majority of shares in another company called Dead Sea Works, Ltd.; which owned a majority of shares in Dead Sea Bromine Co., Ltd.; which owned a majority of shares in Bromine Compounds, Ltd.

The Dead Sea Companies, as indirect subsidiaries of the State of Israel, were not instrumentalities of Israel under the FSIA at any time. Those companies cannot come within the statutory language which grants status as an instrumentality of a foreign state to an entity a “majority of whose shares or other ownership interest is owned by a foreign state or political subdivision thereof.” § 1603(b)(2). We hold that only direct ownership of a majority of shares by the foreign state satisfies the statutory requirement.

Section 1603(b)(2) speaks of ownership. The. Dead Sea Companies urge us to ignore corporate formalities and use the colloquial sense of that term. They ask whether, in common parlance, Israel would be said to own the Dead Sea Companies. We reject this analysis. In issues of corporate law structure often matters. It is evident from the Act’s text that Congress was aware of settled principles of corporate law and legislated within that context. The language of § 1603(b)(2) refers to ownership of “shares,” showing that Congress intended statutory coverage to turn on formal corporate ownership. Likewise, § 1603(b)(1), another component of the definition of instrumentality, refers to a “separate legal person, corporate or otherwise.” In light of these indi-cia that Congress had corporate formalities in mind, we assess whether Israel owned shares in the Dead Sea Companies as a matter of corporate law, irrespective of whether Israel could be said to have owned the Dead Sea Companies in everyday parlance.

A basic tenet of American corporate law is that the corporation and its shareholders are distinct entities. See, e. g., First Nat. City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U. S. 611, 626 (1983) (“Separate legal personality has been described as ‘an almost indispensable aspect of the public corporation’ ”); Burnet v. Clark, 287 U. S. 410, 415 (1932) (“A corporation and its stockholders are generally to be treated as separate entities”). An individual shareholder, by virtue of his ownership of shares, does not own the corporation’s assets and, as a result, does not own subsidiary corporations in which the corporation holds an interest. See 1 W. Fletcher, Cyclopedia of the Law of Private Corporations §31 (rev. ed. 1999). A corporate parent which owns the shares of a subsidiary does not, for that reason alone, own or have legal title to the assets of the subsidiary; and, it follows with even greater force, the parent does not own or have legal title to the subsidiaries of the subsidiary. See id., §31, at 514 (“The properties of two corporations are distinct, though the same shareholders own or control both. A holding corporation does not own the subsidiary’s property”). The fact that the shareholder is a foreign state does not change the analysis. See First Nat. City Bank, supra, at 626-627 (“[Government instrumentalities established as juridical entities distinct and independent from their sovereign should normally be treated as such”).

Applying these principles, it follows that Israel did not own a majority of shares in the Dead Sea Companies. The State of Israel owned a majority of shares, at various times, in companies one or more corporate tiers above the Dead Sea Companies, but at no time did Israel own a majority of shares in the Dead Sea Companies. Those companies were subsidiaries of other corporations.

The veil separating corporations and their shareholders may be pierced in some circumstances, and the Dead Sea Companies essentially urge us to interpret the FSIA as piercing the veil in all cases. The doctrine of piercing the corporate veil, however, is the rare exception, applied in the case of fraud or certain other exceptional circumstances, see, e. g., Burnet, supra, at 415; Fletcher, supra, §§41 to 41.20, and usually determined on a case-by-case basis. The Dead Sea Companies have referred us to no authority for extending the doctrine so far that, as a categorical matter, all subsidiaries are deemed to be the same as the parent corporation. The text of the FSIA gives no indication that Congress intended us to depart from the general rules regarding corporate formalities.

Where Congress intends to refer to ownership in other than the formal sense, it knows how to do so. Various federal statutes refer to “direct and indirect ownership.” See, e. g., 5 U. S. C. § 8477(a)(4)(G)(iii) (referring to an interest “owned directly or indirectly”); 12 U. S. C. § 84(c)(5) (referring to “any corporation wholly owned directly or indirectly by the United States”); 15 U. S. C. § 79b(a)(8)(A) (referring to securities “which are directly or indirectly owned, controlled, or held with power to vote”); § 1802(3) (“The term ‘newspaper owner’ means any person who owns or controls directly, or indirectly through separate or subsidiary corporations, one or more newspaper publications”). The absence of this language in 28 U. S. C. § 1603(b) instructs us that Congress did not intend to disregard structural ownership rules.

The FSIA’s definition of instrumentality refers to a foreign state’s majority ownership of “shares or other ownership interest.” § 1603(b)(2). The Dead Sea Companies would have us read “other ownership interest” to include a state’s “interest” in its instrumentality’s subsidiary. The better reading of the text, in our view, does not support this argument. The words “other ownership interest,” when following the word “shares,” should be interpreted to refer to a type of interest other than ownership of stock. The statute had to be written for the contingency of ownership forms in other countries, or even in this country, that depart from conventional corporate structures. The statutory phrase “other ownership interest” is best understood to accomplish this objective. Reading the term to refer to a state’s interest in entities lower on the corporate ladder would make the specific reference to “shares" redundant. Absent a statutory text or structure that requires us to depart from normal rules of construction, we should not construe the statute in a manner that is strained and, at the same time, would render a statutory term superfluous. See Mertens v. Hewitt Associates, 508 U. S. 248, 258 (1993) (“We will not read the statute to render the modifier superfluous”); United States v. Nordic Village, Inc., 503 U. S. 30, 36 (1992) (declining to adopt a construction that would violate the “settled rule that a statute must, if possible, be construed in such fashion that every word has some operative effect”).

The Dead Sea Companies say that the State of Israel exercised considerable control over their operations, notwithstanding Israel’s indirect relationship to those companies. They appear to think that, in determining instrumentality status under the Act, control may be substituted for an ownership interest. Control and ownership, however, are distinct concepts. See, e. g., United States v. Bestfoods, 524 U. S. 51, 64-65 (1998) (distinguishing between “operation” and “ownership” of a subsidiary’s assets for purposes of Comprehensive Environmental Response, Compensation, and Liability Act of 1980 liability). The terms of § 1603(b)(2) are explicit and straightforward. Majority ownership by a foreign state, not control, is the benchmark of instrumentality status. We need not delve into Israeli law or examine the extent of Israel’s involvement in the Dead Sea Companies’ operations. Even if Israel exerted the control the Dead Sea Companies describe, that would not give Israel a “majority of [the companies’] shares or other ownership interest.” The statutory language will not support a control test that mandates inquiry in every case into the past details of a foreign nation’s relation to a corporate entity in which it does not own a majority of the shares.

The better rule is the one supported by the statutory text and elementary principles of corporate law. A corporation is an instrumentality of a foreign state under the FSIA only if the foreign state itself owns a majority of the corporation’s shares.

We now turn to the second question before us, which provides an alternative reason for affirming the Court of Appeals. See Woods v. Interstate Realty Co., 337 U. S. 535, 537 (1949).

C

To be entitled to removal under § 1441(d), the Dead Sea Companies must show that they are entities “a majority of whose shares or other ownership interest is owned by a foreign state.” § 1603(b)(2). We think the plain text of this provision, because it is expressed in the present tense, requires that instrumentality status be determined at the time suit is filed.

Construing § 1603(b) so that the present tense has real significance is consistent with the “longstanding principle that ‘the jurisdiction of the Court depends upon the state of things at the time of the action brought.’” Keene Corp. v. United States, 508 U. S. 200, 207 (1993) (quoting Mollan v. Torrance, 9 Wheat. 537, 539 (1824)). It is well settled, for example, that federal-diversity jurisdiction depends on the citizenship of the parties at the time suit is filed. See, e. g., Anderson v. Watt, 138 U. S. 694, 702-703 (1891) (“And the [jurisdictional] inquiry is determined by the condition of the parties at the commencement of the suit”); see also Minneapolis & St. Louis R. Co. v. Peoria & Pekin Union R. Co., 270 U. S. 580, 586 (1926) (“The jurisdiction of the lower court depends upon the state of things existing at the time the suit was brought”). The Dead Sea Companies do not dispute that the time suit is filed is determinative under § 1332(a)(4), which provides for suits between “a foreign state, defined in section 1603(a)..., as plaintiff and citizens of a State or of different States.” It would be anomalous to read §1441(d)’s words, “foreign state as defined in section 1603(a),” differently.

The Dead Sea Companies urge us to administer the FSIA like other status-based immunities, such as the qualified immunity accorded a state actor, that are based on the status of an officer at the time of the conduct giving rise to the suit. We think its comparison is inapt. Our cases applying those immunities do not involve the interpretation of a statute. See, e. g., Spalding v. Vilas, 161 U. S. 483, 493-499 (1896) (basing a decision regarding official immunity on common law and considerations of “convenience and public policy”); Scheuer v. Rhodes, 416 U. S. 232, 239-242 (1974).

The reason for the official immunities in those cases does not apply here. The immunities for government officers prevent the threat of suit from “crippl[ing] the proper and effective administration of public affairs.” Spalding, supra, at 498 (discussing immunity for executive officers); see also Pierson v. Ray, 386 U. S. 647, 554 (1967) (judicial immunity serves the public interest in judges who are “at liberty to exercise their functions with independence and without fear of consequences” (internal quotation marks omitted)). Foreign sovereign immunity, by contrast, is not meant to avoid chilling foreign states or their instrumentalities in the conduct of their business but to give foreign states and their instrumentalities some protection from the inconvenience of suit as a gesture of comity between the United States and other sovereigns. Verlinden, 461 U. S., at 486.

For the same reason, the Dead Sea Companies’ reliance on Nixon v. Fitzgerald, 457 U. S. 731 (1982), is unavailing. There, we recognized that the President was immune from liability for official actions taken during his time in office, even against a suit filed when he was no longer serving in that capacity. The immunity served the same function that the other official immunities serve. See id., at 751 (“Because of the singular importance of the President’s duties, diversion of his energies by concern with private lawsuits would raise unique risks to the effective functioning of government”). As noted above, immunity under the FSIA does not serve the same purpose.

The immunity recognized in Nixon was also based on a further rationale, one not applicable here: the constitutional separation of powers. See id., at 749 (“We consider this immunity a functionally mandated incident of the President’s unique office, rooted in the constitutional tradition of the separation of powers and supported by our history”). That rationale is not implicated by the statutory immunity Congress created for actions such as the one before us.

Any relationship recognized under the FSIA between the Dead Sea Companies and Israel had been severed before suit was commenced. As a result, the Dead Sea Companies would not be entitled to instrumentality status even if their theory that instrumentality status could be conferred on a subsidiary were accepted.

* * *

For these reasons, we hold first that a foreign state must itself own a majority of the shares of a corporation if the corporation is to be deemed an instrumentality of the state under the provisions of the FSIA; and we hold second that instrumentality status is determined at the time of the filing of the complaint.

The judgment of the Court of Appeals in No. 01-594 is affirmed, and the writ of certiorari in No. 01-593 is dismissed.

It is so ordered.

Justice Breyer,

with whom Justice O’Connor joins, concurring in part and dissenting in part.

I join Parts I, II-A, and II-C, and dissent only from Part II-B, of the Court’s opinion. Unlike the majority, I believe that the statutory phrase “other ownership interest ... owned by a foreign state,” 28 U. S. C. § 1603(b)(2), covers a Foreign Nation’s legal interest in a Corporate Subsidiary, where that interest consists of the Foreign Nation’s ownership of a Corporate Parent that owns the shares of the Subsidiary.

The Foreign Sovereign Immunities Act of 1976 (FSIA) sets forth legal criteria for determining when a “foreign state,” 28 U. S. C. § 1608(a), can assert a defense of sovereign immunity. The FSIA also specifies that a “foreign state” defendant may ask a federal court to make the relevant sovereign immunity determination. § 1441(d). And the FSIA allows certain foreign-state commercial entities not entitled to sovereign immunity to have the merits of a case heard in federal court. §§ 1330(a), 1441(d), 1605(a)(2). These last-mentioned entities, entitled to invoke federal-court jurisdiction, include corporations that fall within the FSIA’s definition of an “agency or instrumentality of a foreign state,” §§ 1603(a), (b).

The corporate defendants here, subsidiaries of a foreign parent corporation, fall within that definition if “a majority of [their] shares or other ownership interest is owned by” a foreign nation. § 1603(b)(2) (emphasis added). The relevant foreign nation does not directly own a majority of the corporate subsidiaries’ shares. But (simplifying the facts) it does own a corporate parent, which, in turn, owns the corporate subsidiaries’ shares. See ante, at 473-474.

Does this type of majority-ownership interest count as an example of what the statute calls an “other ownership interest”? The Court says no, holding that the text of the FSIA requires that “only direct ownership of a majority of shares by the foreign state satisfies the statutory requirement.” Ante, at 474 (emphasis added). I disagree.

The statute’s language, standing alone, cannot answer the question. That is because the words “own” and “ownership” — neither of which is defined in the FSIA — are not technical terms or terms of art but common terms, the precise legal meaning of which depends upon the statutory context in which they appear. See J. Cribbet & C. Johnson, Principles of the Law of Property 16 (3d ed. 1989) (“Anglo-American law has not made much use of the term ownership in a technical sense”); Black’s Law Dictionary 1049,1105 (6th ed. 1990) (“The term [‘owner’] is ... a nomen generalissi-mum” — a “term of the most general meaning” or “of the most general kind” — “and its meaning is to be gathered from the connection in which it is used, and from the subject-matter to which it is applied”). See also Williams v. Taylor, 529 U. S. 420, 431 (2000) (“We give the words of a statute their ordinary, contemporary, common meaning, absent an indication Congress intended them to bear some different import” (internal quotation marks omitted; emphasis added)).

Thus, this Court has held that “shipowne[r]” can include a corporate shareholder even though, technically speaking, the corporation, not the shareholder, owns the ship. Flink v. Paladini, 279 U. S. 59, 62-63 (1929) (emphasis added). Moreover, this Court has held that a trademark can be “owned by” a parent corporation even though, technically speaking, a subsidiary corporation, not the parent, registered and thus owned the mark. K mart Corp. v. Cartier, Inc., 486 U. S. 281, 292 (1988) (opinion of Kennedy, J.) (emphasis added) (noting “the inability to discern” which “entit[y] . . . can be said to ‘own’ the . . . trademark if . . . the domestic subsidiary is wholly owned by its foreign parent”); id., at 318 (Scalia, J., concurring in part and dissenting in part) (“It may be reasonable for some purposes to say that a trademark nominally owned by a domestic subsidiary is ‘owned by’ its foreign parent corporation”); id., at 319 (“A parent corporation may or may not be said to ‘own’ the assets owned by its subsidiary”). Similarly, here the words “other ownership interest” might, or might not, refer to the kind of majority-ownership interest that arises when one owns the shares of a parent that, in turn, owns a subsidiary. If a shareholder in Company A is an “owner” of Company A’s ship, as in Flink, then why should the shareholder not be an “owner” of Company A’s subsidiary? If Company A’s trademark can be said to be “owned by” its shareholder, as in K mart, then why should Company A’s subsidiary not be said to be “owned by” its shareholder? And, at the very least, can we not say that the shareholder has an “ownership interest” in the subsidiary?

Neither do the various linguistic indicia to which the majority points help resolve the question. As the majority points out, the statute’s use of the word “shares” leans in favor of reading “ownership” as incorporating formal, technical American legal requirements. Ante, at 474-475. But any resulting suggestion of formal technical limitation is neatly counterbalanced by the fact that the “statute had to be written for the contingency of ownership forms in other countries, or even in this country, that depart from conventional corporate structures.” Ante, at 476. And given this latter necessity, there is no reason to read the phrase “shares or other” as if those words meant to exclude from the scope of “other” any kind of mixed, say, debt/equity, ownership arrangement that might involve shares only in part.

The majority’s further claim that Congress’ use of the word “ownership” means “only direct ownership,” ante, at 474 (emphasis added), or formal ownership, founders upon Flink, supra, and K mart, supra, as well as upon several statutes that demonstrate that Congress felt it necessary explicitly to use the word “direct” (a word missing in the FSIA) in order to achieve that result. See, e. g., 20 U. S. C. § 1087-3(a) (“common shares ... directly owned by a Holding Company” (emphasis added)); 26 U. S. C. § 165(g)(3)(A) (requiring that “the taxpayer owns directly stock” in a corporation (emphasis added)); § 851(c)(3)(A) (stock “owned directly by one or more of the other corporations” (emphasis added)). Were the Court’s logic correct, see ante, at 476-477, the word “direct” in these statutes would be redundant.

The majority’s “veil piercing” argument, ante, at 475-476, is beside the point. So is the majority’s reiteration of the separateness of a corporation and its shareholders, ante, at 474-475, a formal separateness that this statute explicitly sets aside. See 28 U. S. C. §§ 1603(a), (b) (acknowledging the separateness of a corporate entity but nevertheless deliberately conferring the “foreign state” status of the shareholder upon the corporation itself); H. R. Rep. No. 94-1487, p. 15 (1976) (same). See also Working Group of the American Bar Association, Reforming the Foreign Sovereign Immunities Act, 40 Colum. J. Transnat’l L. 489, 517-518 (2002) (hereinafter ABA Working Group) (FSIA rejects the “separate-entity” rule that courts had often applied to deny immunity to state-owned corporations).

Statutory interpretation is not a game of blind man’s bluff. Judges are free to consider statutory language in light of a statute’s basic purposes. And here, as in Flink, supra, and K mart, supra, an examination of those purposes sheds considerable light. The statute itself makes clear that it seeks: (1) to provide a foreign-state defendant in a legal action the right to have its claim of a sovereign immunity bar decided by the “courts of the United States,” i. e., the federal courts, 28 U. S. C. § 1604; see § 1441(d); and (2) to make certain that the merits of unbarred claims against foreign states, say, states engaging in commercial activities, see § 1605(a)(2), will be decided “in the same manner” as similar claims against “a private individual,” § 1606; but (3) to guarantee a foreign state defending an unbarred claim certain protections, including a prohibition of punitive damages, the right to removal to federal court, a trial before a judge, and other procedural rights (related to service of process, venue, attachment, and execution of judgments). §§ 1830, 1391(f), 1441(d), 1606, 1608-1611. See Verlinden B. V. v. Central Bank of Nigeria, 461 U. S. 480, 497 (1983) (“Congress deliberately sought to channel cases against foreign sovereigns away from the state courts and into federal courts”); H. R. Rep. No. 94-1487, at 32 (“giv[ing] foreign states clear authority to remove to a Federal forum actions brought against them in the State courts” in light of “the potential sensitivity of actions against foreign states and the importance of developing a uniform body of law in this area”); id., at 13 (“Such broad jurisdiction in the Federal courts should be conducive to uniformity in decision, which is desirable since a disparate treatment of cases involving foreign governments may have adverse foreign relations consequences”).

Most important for present purposes, the statute seeks to guarantee these protections to the foreign nation not only when it acts directly in its own name but also when it acts through separate legal entities, including corporations and other “organ[s].” 28 U. S. C. § 1603(b).

Given these purposes, what might lead Congress to grant protection to a Foreign Nation acting through a Corporate Parent but deny the same protection to the Foreign Nation acting through, for example, a wholly owned Corporate Subsidiary? The answer to this question is: In terms of the statute’s purposes, nothing at all would lead Congress to make such a distinction.

As far as this statute is concerned, decisions about how to incorporate, how to structure corporate entities, or whether to act through a single corporate layer or through several corporate layers are matters purely of form, not of substance. Cf. H. R. Rep. No. 94-1487, at 15 (agencies or instrumentalities “could assume a variety of forms”); First Nat. City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U. S. 611, 625 (1983) (noting that “developing countries” often “establish separate juridical entities ... to make large-scale national investments”). The need for federal-court determination of a sovereign immunity claim is no less important where subsidiaries are involved. The need for procedural protections is no less compelling. The risk of adverse foreign policy consequences is no less great. See ABA Working Group 523 (“The strength of a foreign state’s sovereign interests ... does not necessarily dissipate when it employs more complicated legal structures resembling those used by modern private businesses”); Dellapenna, Refining the Foreign Sovereign Immunities Act, 9 Willamette J. Int’l L. & Disp. Resol. 57, 92-93 (2001). See also A. Kumar, The State Holding Company: Issues and Options 3 (World Bank Discussion Paper No. 187, 1992) (“The existence of state holding companies, in many variants, is widespread”).

That is why I doubt the majority’s claim that its reading of the text of the FSIA is “[t]he better reading,” ante, at 476, leading to “[t]he better rule,” ante, at 477. The majority’s rule is not better for a foreign nation, say, Mexico or Honduras, which may use “a tiered corporate structure to manage and control important areas of national interest, such as natural resources,” ABA Working Group 523, and, as a result, will find its ability to use the federal courts to adjudicate matters of national importance and “potential sensitivity” restricted, H. R. Rep. No. 94-1487, at 32. Congress is most unlikely to characterize as “better” a rule tied to legal formalities that undercuts its basic jurisdictional objectives. And working lawyers will now have to factor into complex corporate restructuring equations (determining, say, whether to use an intermediate holding company when merging or disaggregating even wholly owned government corporations) a risk that the government might lose its previously available access to federal court.

Given these consequences, from what perspective can the Court’s unnecessarily technical reading of this part of the statute produce a “better rule”? To hold, as the Court does today, that for purposes of the FSIA “other ownership interest” does not include the interest that a Foreign Nation has in a tiered Corporate Subsidiary “would be not merely to depart from the primary rule that words are to be taken in their ordinary sense, but to narrow the operation of the statute to an extent that would seriously imperil the accomplishment of its purpose.” Danciger v. Cooley, 248 U. S. 319, 326 (1919).

I believe that the Court should decide this issue just as it .decided Flink. There, the Court unanimously determined that, in light of “[t]he policy of the statutes” in question, a corporate shareholder was an “owner” of a ship, which, tech-ideally speaking, belonged to the corporation. 279 U. S., at 62-68. Justice Holmes wrote, in his opinion for the Court:

“For th[e] purpose [of these statutes] no rational distinction can be taken between several persons owning shares in a vessel [here, a subsidiary] directly and making the same division by putting the title in a corporation and distributing the corporate stock. The policy of the statutes must extend equally to both.... We are of [the] opinion that the words of the acts must be taken in a broad and popular sense in order not to defeat the manifest intent. This is not to ignore the distinction between a corporation and its members, a distinction that cannot be overlooked even in extreme cases . . . , but to interpret an untechnical word [‘owner’] in the liberal way in which we believe it to have been used _” Ibid.

No more need be said.


author: Justice O’Connor

text:
    FRANCHISE TAX BOARD OF CALIFORNIA v. HYATT et al.
    No. 02-42.
    Argued February 24, 2008
    Decided April 23, 2003

      O’Connor, J., delivered the opinion for a unanimous Court.

      Felix E. Leatherwood, Deputy Attorney General of California, argued the cause for petitioner. With him on the briefs were Bill Lockyer, Attorney General, Manuel M. Medeiros, State Solicitor, David S. Chaney, Senior Assistant Attorney General, and William Dean Freeman, Lead Supervising Deputy Attorney General.

      H. Bartow Farr III argued the cause for respondents. With him on the brief were Peter C. Bernhard and Donald J. Kula.

      Briefs of amici curiae urging reversal were filed for the State of Florida et al. by Richard E. Dornan, Attorney General of Florida, Jonathan A Glogau, Barbara J. Ritchie, Acting Attorney General of Alaska, and Thomas R. Keller, Acting Attorney General of Hawaii, and by the Attorneys General for their respective jurisdictions as follows: Ken Salazar of Colorado, Richard Blumenthal of Connecticut, M. Jane Brady of Delaware, James E. Ryan of Illinois, Steve Carter of Indiana, G. Steven Rowe of Maine, J. Joseph Curran, Jr., of Maryland, Jennifer M. Granholm of Michigan, Mike Moore of Mississippi, Mike McGrath of Montana, Wayne Stenehjem of North Dakota, Betty D. Montgomery of Ohio, Anabelle Rodriguez of Puerto Rico, Mark L. Shurtleff of Utah, William H. Sorrell of Vermont, Jerry W. Kilgore of Virginia, and Darrell V. McGraw, Jr., of West Virginia; for the Multistate Tax Commission by Frank D. Katz; and for the National Governors Association et al. by Richard Ruda and James I. Crowley.

        Sharon L. Browne filed a brief for the Pacific Legal Foundation as ami-cus curiae urging affirmance.

   Justice O’Connor

delivered the opinion of the Court.

We granted certiorari to resolve whether the Nevada Supreme Court’s refusal to extend full faith and credit to California’s statute immunizing its tax collection agency from suit violates Article IV, §1, of the Constitution. We conclude it does not, and we therefore affirm the judgment of the Nevada Supreme Court.

I

Respondent Gilbert P. Hyatt (hereinafter respondent) filed a “part-year” resident income tax return in California for 1991. App. to Pet. for Cert. 54. In the return, respondent represented that as of October 1, 1991, he had ceased to be a California resident and had become a resident of Nevada. In 1993, petitioner California Franchise Tax Board (CFTB) commenced an audit to determine whether respondent had underpaid state income taxes. Ibid. The audit focused on respondent’s claim that he had changed residency shortly before receiving substantial licensing fees for certain patented inventions related to computer technology.

At the conclusion of its audit, CFTB determined that respondent was a California resident until April 3, 1992, and accordingly issued notices of proposed assessments for income taxes for 1991 and 1992 and imposed substantial civil fraud penalties. Id., at 56-57, 58-59. Respondent protested the proposed assessments and penalties in California through CFTB’s administrative process. See Cal. Rev. & Tax. Code Ann. §§ 19041, 19044-19046 (West 1994).

On January 6, 1998, with the administrative protest ongoing in California, respondent filed a lawsuit against CFTB in Nevada in Clark County District Court. Respondent alleges that CFTB directed “numerous and continuous contacts ... at Nevada” and committed several torts during the course of the audit, including invasion of privacy, outrageous conduct, abuse of process, fraud, and negligent misrepresentation. App. to Pet. for Cert. 51-52, 54. Respondent seeks punitive and compensatory damages. Id., at 51-52. He also sought a declaratory judgment “eonfirm[ing] [his] status as a Nevada resident effective as of September 26, 1991,” id., at 51, but the District Court dismissed the claim for lack of subject matter jurisdiction on April 16,1999, App. 93-95.

During the discovery phase of the Nevada lawsuit, CFTB filed a petition in the Nevada Supreme Court for a writ of mandamus, or in the alternative, for a writ of prohibition, challenging certain of the District Court’s discovery orders. While that petition was pending, CFTB filed a motion in the District Court for summary judgment or, in the alternative, for dismissal for lack of jurisdiction. CFTB argued that the District Court lacked subject matter jurisdiction because principles of sovereign immunity, full faith and credit, choice of law, comity, and administrative exhaustion all required that the District Court apply California law, under which:

“Neither a public entity nor a public employee is liable for an injury caused by:
“(a) Instituting any judicial or administrative proceeding or action for or incidental to the assessment or collection of a tax [or]
“(b) An act or omission in the interpretation or application of any law relating to a tax.” Cal. Govt. Code Ann. §860.2 (West 1995).

The District Court denied CFTB’s motion for summary judgment or dismissal, prompting CFTB to file a second petition in the Nevada Supreme Court. This petition sought a writ of mandamus ordering the dismissal of the case, or in the alternative, a writ of prohibition and mandamus limiting the scope of the suit to claims arising out of conduct that occurred in Nevada.

On June 13, 2001, the Nevada Supreme Court granted CFTB’s second petition, dismissed the first petition as moot, and ordered the District Court to enter summary judgment in favor of CFTB. App. to Pet. for Cert. 38-43. On April 4, 2002, however, the court granted respondent’s petition for rehearing, vacated its prior ruling, granted CFTB’s second petition in part, and denied it in part. Id., at 5-18. The court held that the District Court “should have declined to exercise its jurisdiction over the underlying negligence claim under comity principles” but that the intentional tort claims could proceed to trial. Id., at 7.

The Nevada Supreme Court noted that both Nevada and California have generally waived their sovereign immunity from suit in state court and “have extended the waivers to their state agencies or public employees except when state statutes expressly provide immunity.” Id., at 9-10 (citing Nev. Rev. Stat. §41.031 (1996); Cal. Const., Art. 3, §5; and Cal. Govt. Code Ann. §820 (West 1995)). Whereas Nevada has not conferred immunity on its state agencies for intentional torts committed within the course and scope of employment, the court acknowledged that “California has expressly provided [CFTB] with complete immunity.” App. to Pet. for Cert. 10 (citing Cal. Govt. Code Ann. §860.2 (West 1995) and Mitchell v. Franchise Tax Board, 183 Cal. App. 3d 1133, 228 Cal. Rptr. 750 (1986)). To determine which State’s law should apply, the court applied principles of comity.

Though the Nevada Supreme Court recognized the doctrine of comity as “an accommodation policy, under which the courts of one state voluntarily give effect to the laws and judicial decisions of another state out of deference and respect, to promote harmonious interstate relations,” the court also recognized its duty to determine whether the application of California law “would contravene Nevada’s policies or interests,” giving “due regard to the duties, obligations, rights and convenience of Nevada’s citizens.” App. to Pet. for Cert. 11. “An investigation is generally considered to be a discretionary function,” the court observed, “and Nevada provides its [own] agencies with immunity for the performance of a discretionary function even if the discretion is abused.” Id., at 12. “[AJffording [CFTB] statutory immunity for negligent acts,” the court therefore concluded, “does not contravene any Nevada interest in this case.” Ibid. The court accordingly held that “the district court should have declined to exercise its jurisdiction” over respondent’s negligence claim under principles of comity. Id., at 7. With respect to the intentional torts, however, the court held that “affording [CFTB] statutory immunity . . . does contravene Nevada’s policies and interests in this case.” Id., at 12. Because Nevada “does not allow its agencies to claim immunity for discretionary acts taken in bad faith, or for intentional torts committed in the course and scope of employment,” the court held that “Nevada’s interest in protecting its citizens from injurious intentional torts and bad faith acts committed by sister states’ government employees” should be accorded greater weight “than California’s policy favoring complete immunity for its taxation agency.” Id., at 12-13.

We granted certiorari to resolve whether Article IV, § 1, of the Constitution requires Nevada to give full faith and credit to California’s statute providing its tax agency with immunity from suit, 537 U. S. 946 (2002), and we now affirm.

II

The Constitution’s Full Faith and Credit Clause provides: “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 thereof.” Art. IV, § 1. As we have explained, “[o]ur precedent differentiates the credit owed to laws (legislative measures and common law) and to judgments.” Baker v. General Motors Corp., 522 U. S. 222, 232 (1998). Whereas the full faith and credit command “is exacting” with respect to “[a] final judgment . . . rendered by a court with adjudicatory authority over the subject matter and persons governed by the judgment,” id., at 233, it is less demanding with respect to choice of laws. We have held that 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.’” Sun Oil Co. v. Wortman, 486 U. S. 717, 722 (1988) (quoting Pacific Employers Ins. Co. v. Industrial Accident Comm’n, 306 U. S. 493, 501 (1939)).

The State of Nevada is undoubtedly “competent to legislate” with respect to the subject matter of the alleged intentional torts here, which, it is claimed, have injured one of its citizens within its borders. “‘[F]or a State’s substantive law to be selected in a constitutionally permissible manner, that State must have a significant contact or significant aggregation of contacts, creating state interests, such that choice of its law is neither arbitrary nor fundamentally unfair.’ ” Phillips Petroleum Co. v. Shutts, 472 U. S. 797, 818 (1985) (quoting Allstate Ins. Co. v. Hague, 449 U. S. 802, 312-313 (1981) (plurality opinion)); see 472 U. S., at 822-823. Such contacts are manifest in this case: the plaintiff claims to have suffered injury in Nevada while a resident there; and it is undisputed that at least some of the conduct alleged to be tortious occurred in Nevada, Brief for Petitioner 33-34, n. 16. See, e. g., Carroll v. Lanza, 349 U. S. 408, 413 (1955) (“The State where the tort occurs certainly has a concern in the problems following in the wake of the injury”); Pacific Employers Ins. Co. v. Industrial Accident Comm’n, supra, at 503 (“Few matters could be deemed more appropriately the concern of the state in which [an] injury occurs or more completely within its power”).

CFTB does not contend otherwise. Instead, CFTB urges this Court to adopt a “new rule” mandating that a state court extend full faith and credit to a sister State’s statutorily recaptured sovereign immunity from suit when a refusal to do so would “interfer[e] with a State’s capacity to fulfill its own sovereign responsibilities.” Brief for Petitioner 13 (internal quotation marks omitted).

We have, in the past, appraised and balanced state interests when invoking the Full Faith and Credit Clause to resolve conflicts between overlapping laws of coordinate States. See Bradford Elec. Light Co. v. Clapper, 286 U. S. 145 (1932) (holding that the Constitution required a federal •court sitting in New Hampshire to apply a Vermont workers’ compensation statute in a tort suit brought by the administrator of a Vermont worker killed in New Hampshire). This balancing approach quickly proved unsatisfactory. Compare Alaska Packers Assn. v. Industrial Accident Comm’n of Cal., 294 U. S. 532, 550 (1935) (holding that a forum State, which was the place of hiring but not of a claimant’s domicile, could apply its own law to compensate for an accident in another State, because “[njo persuasive reason” was shown for requiring application of the law of the State where the accident occurred), with Pacific Employers Ins. Co. v. Industrial Accident Comm’n, supra, at 504-505 (holding that the State where an accident occurred could apply its own workers’ compensation law and need not give hill faith and credit to that of the State of hiring and domicile of the employer and employee). As Justice Robert H. Jackson, recounting these cases, aptly observed, “it [is] difficult to point to any field in which the Court has more completely demonstrated or more candidly confessed the lack of guiding standards of a legal character than in trying to determine what choice of law is required by the Constitution.” Full Faith and Credit — The Lawyer’s Clause of the Constitution, 45 Colum. L. Rev. 1, 16 (1945).

In light of this experience, we abandoned the balancing-of-interests approach to conflicts of law under the Full Faith and Credit Clause. Allstate Ins. Co. v. Hague, 449 U. S., at 308, n. 10 (plurality opinion); id., at 322, n. 6 (Stevens, J., concurring in judgment); id., at 339, n. 6 (Powell, J., dissenting). We have recognized, instead, that “it is frequently the case under the Full Faith and Credit Clause that a court can lawfully apply either the law of one State or the contrary law of another.” Sun Oil Co. v. Wortman, supra, at 727. We thus have held that a State need not “substitute the statutes of other states for its own statutes dealing with a subject matter concerning which it is competent to legislate.” Pacific Employers Ins. Co. v. Industrial Accident Comm’n, supra, at 501; see Baker v. General Motors Corp., supra, at 232; Sun Oil Co. v. Wortman, supra, at 722; Phillips Petroleum Co. v. Shutts, supra, at 818-819. Acknowledging this shift, CFTB contends that this case demonstrates the need for a new rule under the Full Faith and Credit Clause that will protect “core sovereignty” interests as expressed in state statutes delineating the contours of the State’s immunity from suit. Brief for Petitioner 13.

We disagree. We have confronted the question whether the Full Faith and Credit Clause requires a forum State to recognize a sister State’s legislatively recaptured immunity once before. In Nevada v. Hall, 440 U. S. 410 (1979), an employee of the University of Nevada was involved in an automobile accident with California residents, who filed suit in California and named Nevada as a defendant. The California courts refused to apply a Nevada statute that capped damages in tort suits against the State on the ground that “to surrender jurisdiction or to limit respondents’ recovery to the $25,000 maximum of the Nevada statute would be obnoxious to its statutorily based policies of jurisdiction over nonresident motorists and full recovery.” Id., at 424.

We affirmed, holding, first, that the Constitution does not confer sovereign immunity on States in the courts of sister States. Id., at 414-421. Petitioner does not ask us to reexamine that ruling, and we therefore decline the invitation of petitioner’s amici States, see Brief for State of Florida et al. as Amici Curiae 2, to do so. See this Court’s Rule 14.1(a); Mazer v. Stein, 347 U. S. 201, 206, n. 5 (1954) (‘We do not reach for constitutional questions not raised by the parties”).

The question presented here instead implicates Hall’s second holding: that the Full Faith and Credit Clause did not require California to apply Nevada’s sovereign immunity statutes where such application would violate California’s own legitimate public policy. 440 U. S., at 424. The Court observed in a footnote:

“California’s exercise of jurisdiction in this case poses no substantial threat to our constitutional system of cooperative federalism. Suits involving traffic accidents occurring outside of Nevada could hardly interfere with Nevada’s capacity to fulfill its own sovereign responsibilities. We have no occasion, in this case, to consider whether different state policies, either of California or of Nevada, might require a different analysis or a different result.” Id., at 424, n. 24.

CFTB asserts that an analysis of this lawsuit’s effects should lead to a different result: that the Full Faith and Credit Clause requires Nevada to apply California’s immunity statute to avoid interference with California’s “sovereign responsibility” of enforcing its income tax laws. Brief for Petitioner 13.

Our past experience with appraising and balancing state interests under the Full Faith and Credit Clause counsels against adopting CFTB’s proposed new rule. Having recognized, in Hall, that a suit against a State in a sister State’s court “necessarily implicates the power and authority” of both sovereigns, 440 U. S., at 416, the question of which sovereign interest should be deemed more weighty is not one that can be easily answered. Yet petitioner’s rule would elevate California’s sovereignty interests above those of Nevada, were we to deem this lawsuit an interference with California’s “core sovereign responsibilities.” We rejected as “unsound in principle and unworkable in practice” a rule of state immunity from federal regulation under the Tenth Amendment that turned on whether a particular state government function was “integral” or “traditional.” Garcia v. San Antonio Metropolitan Transit Authority, 469 U. S. 528, 546-547 (1985). CFTB has convinced us of neither the relative soundness nor the relative practicality of adopting a similar distinction here.

Even were we inclined to embark on a course of balancing States’ competing sovereign interests to resolve conflicts of laws under the Full Faith and Credit Clause, this case would not present the occasion to do so. There is no principled distinction between Nevada’s interests in tort claims arising out of its university employee’s automobile accident, at issue in Hall, and California’s interests in the tort claims here arising out of its'tax collection agency’s residency audit. To be sure, the power to promulgate and enforce income tax laws is an essential attribute of sovereignty. See Franchise Tax Bd. of Cal. v. Postal Service, 467 U. S. 512, 523 (1984) (“ ‘[Tjaxes are the life-blood of government’ ” (quoting Bull v. United States, 295 U. S. 247, 259-260 (1935))). But the university employee’s educational mission in Hall might also be so described. Cf. Brown v. Board of Education, 347 U. S. 483, 493 (1954) (“[Ejducation is perhaps the most important function of state and local governments”).

If we were to compare the degree to which the allegedly tortious acts here and in Hall are related to a core sovereign function, we would be left to ponder the relationship between an automobile accident and educating, on one hand, and the intrusions alleged here and collecting taxes, on the other. We discern no constitutionally significant distinction between these relationships. To the extent CFTB complains of the burdens and expense of out-of-state litigation, and the diversion of state resources away from the performance of important state functions, those burdens do not distinguish this case from any other out-of-state lawsuit against California or one of its agencies.

States’ sovereignty interests are not foreign to the full faith and credit command. But we are not presented here with a case in which a State has exhibited a “policy of hostility to the public Acts” of a sister State. Carroll v. Lanza, 349 U. S., at 413. The Nevada Supreme Court sensitively applied principles of comity with a healthy regard for California’s sovereign status, relying on the contours of Nevada’s own sovereign immunity from suit as a benchmark for its analysis. See App. to Pet. for Cert. 10-13.

In short, we heed the lessons learned as a result of Bradford Elec. Light Co. v. Clapper, 286 U. S. 145 (1932), and its progeny. Without a rudder to steer us, we decline to embark on the constitutional course of balancing coordinate States’ competing sovereign interests to resolve conflicts of laws under the Full Faith and Credit Clause.

The judgment of the Nevada Supreme Court is affirmed.

It is so ordered.


author: Justice Kennedy

text:
    MASSARO v. UNITED STATES
    No. 01-1559.
    Argued February 25, 2003
    Decided April 23, 2003

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

      Herald Price Fahringer argued the cause for petitioner. With him on the briefs were Erica T. Dubno and Eugene Gressman.

      Sri Srinivasan argued the cause for the United States. With him on the brief were Solicitor General Olson, Assistant Attorney General Chertoff, Deputy Solicitor General Dreeben, and Steven L. Lane.

         David A Lewis and David M. Porter filed a brief for the National Association of Criminal Defense Lawyers et al. as amici curiae urging reversal.

   Justice Kennedy

delivered the opinion of the Court.

Petitioner, Joseph Massaro, was indicted on federal racketeering charges, including murder in aid of racketeering, 18 U. S. C. § 1962(d), in connection with the shooting death of Joseph Fiorito. He was tried in the United States District Court for the Southern District of New York. The day before Massaro’s trial was to begin, prosecutors learned of what appeared to be a critical piece of evidence: a bullet allegedly recovered from the car in which the victim’s body was found. They waited for several days, however, to inform defense counsel of this development. Not until the trial was underway and the defense had made its opening statement did they make this disclosure. After the trial court and the defense had been informed of the development but still during the course of trial, defense counsel more than once declined the trial court’s offer of a continuance so the bullet could be examined. Massaro was convicted and sentenced to life imprisonment.

On direct appeal new counsel for Massaro argued the District Court had erred in admitting the bullet in evidence, but he did not raise any claim relating to ineffective assistance of trial counsel. The Court of Appeals for the Second Circuit affirmed the conviction. Judgt. order reported at 57 F. 3d 1063 (1995).

Massaro later filed a motion under 28 U. S. C. §2255, seeking to vacate his conviction. As relevant here, he claimed that his trial counsel had rendered ineffective assistance in failing to accept the trial court’s offer to grant a continuance. The United States District Court for the Southern District of New York found this claim procedurally defaulted because Massaro could have raised it on direct appeal.

The Court of Appeals for the Second Circuit affirmed. 27 Fed. Appx. 26 (1995). The court acknowledged that ineffective-assistance claims usually should be excused from procedural-default rules because an attorney who handles both trial and appeal is unlikely to raise an ineffective-assistance claim against himself. Nevertheless, it adhered to its decision in Billy-Eko v. United States, 8 F. 3d 111 (1993). Under Billy-Eko, when the defendant is represented by new counsel on appeal and the ineffective-assistance claim is based solely on the record made at trial, the claim must be raised on direct appeal; failure to do so results in procedural default unless the petitioner shows cause and prejudice. Finding that Massaro was represented by new counsel on appeal, that his trial counsel’s ineffectiveness was evident from the record, and that he had failed to show cause or prejudice, the Court of Appeals held him procedurally barred from bringing the ineffective-assistance claim on collateral review.

We granted certiorari. 536 U. S. 990 (2002). Petitioner now urges us to hold that claims of ineffective assistance of counsel need not be raised on direct appeal, whether or not there is new counsel and whether or not the basis for the claim is apparent from the trial record. The Federal Courts of Appeals are in conflict on this question, with the Seventh Circuit joining the Second Circuit, see Guinan v. United States, 6 F. 3d 468 (CA7 1993), and 10 other Federal Courts of Appeals taking the position that there is no procedural default for failure to raise an ineffective-assistance claim on direct appeal, see, e. g., United States v. Cofske, 157 F. 3d 1, 2 (CA1 1998), cert. denied, 526 U. S. 1059 (1999); United States v. Jake, 281 F. 3d 123, 132, n. 7 (CA3 2002); United States v. King, 119 F. 3d 290, 295 (CA4 1997); United States v. Rivas, 157 F. 3d 364, 369 (CA5 1998); United States v. Neuhausser, 241 F. 3d 460, 474 (CA6), cert. denied, 534 U. S. 879 (2001); United States v. Evans, 272 F. 3d 1069, 1093 (CA8 2001), cert. denied, 535 U. S. 1029 (2002); United States v. Rewald, 889 F. 2d 836, 859 (CA9 1989), cert. denied, 498 U. S. 819 (1990); United States v. Galloway, 56 F. 3d 1239, 1240 (CA10 1995) (en banc); United States v. Griffin, 699 F. 2d 1102, 1107-1109 (CA11 1983); United States v. Richardson, 167 F. 3d 621, 626 (CADC), cert. denied, 528 U. S. 895 (1999). We agree with the majority of the Courts of Appeals, and we reverse.

The background for our discussion is the general rule that claims not raised on direct appeal may not be raised on collateral review unless the petitioner shows cause and prejudice. See United States v. Frady, 456 U. S. 152, 167-168 (1982); Bousley v. United States, 523 U. S. 614, 621-622 (1998). The procedural-default rule is neither a statutory nor a constitutional requirement, but it is a doctrine adhered to by the courts to conserve judicial resources and to respect the law’s important interest in the finality of judgments. We conclude that requiring a criminal defendant to bring ineffective-assistance-of-counsel claims on direct appeal does not promote these objectives.

As Judge Easterbrook has noted, “[r]ules of procedure should be designed to induce litigants to present their contentions to the right tribunal at the right time.” Guinan, supra, at 474 (concurring opinion). Applying the usual procedural-default rule to ineffective-assistance claims would have the opposite effect, creating the risk that defendants would feel compelled to raise the issue before there has been an opportunity fully to develop the factual predicate for the claim. Furthermore, the issue would be raised for the first time in a forum not best suited to assess those facts. This is so even if the record contains some indication of deficiencies in counsel’s performance. The better-reasoned approach is to permit ineffective-assistance claims to be brought in the first instance in a timely motion in the district court under §2255. We hold that an ineffective-assistance-of-counsel claim may be brought in a collateral proceeding under § 2255, whether or not the petitioner could have raised the claim on direct appeal.

In light of the way our system has developed, in most cases a motion brought under §2255 is preferable to direct appeal for deciding claims of ineffective assistance. When an ineffective-assistance claim is brought on direct appeal, appellate counsel and the court must proceed on a trial record not developed precisely for the object of litigating or preserving the claim and thus often incomplete or inadequate for this purpose. Under Strickland v. Washington, 466 U. S. 668 (1984), a defendant claiming ineffective counsel must show that counsel’s actions were not supported by a reasonable strategy and that the error was prejudicial. The evidence introduced at trial, however, will be devoted to issues of guilt or innocence, and the resulting record in many cases will not disclose the facts necessary to decide either prong of the Strickland analysis. If the alleged error is one of commission, the record may reflect the action taken by counsel but not the reasons for it. The appellate court may have no way of knowing whether a seemingly unusual or misguided action by counsel had a sound strategic motive or was taken because the counsel’s alternatives were even worse. See Guinan, supra, at 473 (Easterbrook, J., concurring) (“No matter how odd or deficient trial counsel’s performance may seem, that lawyer may have had a reason for acting as he did. ... Or it may turn out that counsel’s overall performance was sufficient despite a glaring omission . . .”). The trial record may contain no evidence of alleged errors of omission, much less the reasons underlying them. And evidence of alleged conflicts of interest might be found only in attorney-client correspondence or other documents that, in the typical criminal trial, are not introduced. See, e. g., Billy-Eko, supra, at 114. Without additional factual development, moreover, an appellate court may not be able to ascertain whether the alleged error was prejudicial.

Under the rule we adopt today, ineffective-assistance claims ordinarily will be litigated in the first instance in the district court, the forum best suited to developing the facts necessary to determining the adequacy of representation during an entire trial. The court may take testimony from witnesses for the defendant and the prosecution and from the counsel alleged to have rendered the deficient performance. See, e. g., Griffin, 699 F. 2d, at 1109 (In a §2255 proceeding, the defendant “has a full opportunity to prove facts establishing ineffectiveness of counsel, the government has a full opportunity to present evidence to the contrary, the district court hears spoken words we can see only in print and sees expressions we will never see, and a factual record bearing precisely on the issue is created”); Beaulieu v. United States, 930 F. 2d 805 (CA10 1991) (partially rev’d on other grounds, United States v. Galloway, 56 F. 3d 1239 (CA10 1995). In addition, the §2255 motion often will be ruled upon by the same district judge who presided at trial. The judge, having observed the earlier trial, should have an advantageous perspective for determining the effectiveness of counsel’s conduct and whether any deficiencies were prejudicial.

The Second Circuit’s rule creates inefficiencies for courts and counsel, both on direct appeal and in the collateral proceeding. On direct appeal it puts counsel into an awkward position vis-á-vis trial counsel. Appellate counsel often need trial counsel’s assistance in becoming familiar with a lengthy record on a short deadline, but trial counsel will be unwilling to help appellate counsel familiarize himself with a record for the purpose of understanding how it reflects trial counsel’s own incompetence.

Subjecting ineffective-assistance claims to the usual eause- and-prejudice rule also would create perverse incentives for counsel on direct appeal. To ensure that a potential ineffective-assistance claim is not waived — and to avoid incurring a claim of ineffective counsel at the appellate stage— counsel would be pressured to bring claims of ineffective trial counsel, regardless of merit.

Even meritorious claims would fail when brought on direct appeal if the trial record were inadequate to support them. Appellate courts would waste time and resources attempting to address some claims that were meritless and other claims that, though colorable, would be handled more efficiently if addressed in the first instance by the district court on collateral review. See, e. g., United States v. Galloway, supra, at 1241 (“threat of... procedural bar has doubtless resulted in many claims being asserted on direct appeal only to protect the record . . . unnecessarily burdening] both the parties and the court . . .”)• This concern is far from speculative. The Court of Appeals for the Second Circuit, in light of its rule applying procedural default to ineffective-assistance claims, has urged counsel to “err on the side of inclusion on direct appeal,” Billy-Eko, 8 F. 3d, at 116.

On collateral review, the Second Circuit’s rule would cause additional inefficiencies. Under that rule a court on collateral review must. determine whether appellate counsel is “new.” Questions may arise, for example, about whether a defendant has retained new appellate counsel when different lawyers in the same law office handle trial and appeal. The habeas court also must engage in a painstaking review of the trial record solely to determine if it was sufficient to support the ineffectiveness claim and thus whether it should have been brought on direct appeal. A clear rule allowing these claims to be brought in a proceeding under §2255, by contrast, will eliminate these requirements. Although we could “require the parties and the district judges to search for needles in haystacks — to seek oút the rare claim that could have been raised on direct appeal, and deem it waived,” Guinan, 6 F. 3d, at 475 (Easterbrook, J., concurring) — we do not see the wisdom in requiring a court to spend time on exercises that, in most instances, will produce no benefit. It is a better use of judicial resources to allow the district court on collateral review to turn at once to the merits.

The most to be said, for the rule in the Second Circuit is that it will speed resolution of some ineffective-assistance claims. For the reasons discussed, however, we think few such claims will be capable of resolution on direct appeal and thus few will benefit from earlier resolution. And the benefits of the Second Circuit’s rule in those rare instances are outweighed by the increased judicial burden the rule would impose in many other cases, where a district court on collateral review would be forced to conduct the cause-and-prejudice analysis before turning to the merits. The Second Circuit’s rule, moreover, does not produce the benefits of other rules requiring claims to be raised at the earliest opportunity — such as the contemporaneous objection rule— because here, raising the claim on direct appeal does not permit the trial court to avoid the potential error in the first place.

A growing majority of state courts now follow the rule we adopt today. For example, the Supreme Court of Pennsylvania recently changed its position to hold that “a claim raising trial counsel ineffectiveness will no longer be considered waived because new counsel on direct appeal did not raise a claim related to prior counsel’s ineffectiveness.” Commonwealth v. Grant, 572 Pa. 48, 67, 813 A. 2d 726, 738 (2002); see also id., at 62-67, and n. 13, 813 A. 2d, at 735-738, and n. 13 (cataloging other States’ case law adopting this position).

Although the Government now urges us to adopt the rule of the Court of Appeals for the Second Circuit, the Government took the opposite approach in some previous cases, arguing not only that claims of ineffective assistance of counsel could be brought in the first instance in a motion under § 2255, but that they must be brought in such a motion proceeding and not on direct appeal. See, e. g., United States v. Cronic, 466 U. S. 648, 667, n. 42 (1984). We do not go this far. We do not hold that ineffective-assistance claims must be reserved for collateral review. There may be cases in which trial counsel’s ineffectiveness is so apparent from the record that appellate counsel will consider it advisable to raise the issue on direct appeal. There may be instances, too, when obvious deficiencies in representation will be addressed by an appellate court sua sponte. In those cases, certain questions may arise in subsequent proceedings under § 2255 concerning the conclusiveness of determinations made on the ineffective-assistance claims raised on direct appeal; but these matters of implementation are not before us. We do hold that failure to raise an ineffective-assistance-of-eounsel claim on direct appeal does not bar the claim from being brought in a later, appropriate proceeding under § 2255.

The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.