U.S. Supreme Court Phillips Petroleum Co. v. Shutts, 472
U.S. 797 (1985) Phillips Petroleum Co. v.
Shutts No. 84-233 Argued February 25,
1985 Decided June 26, 1985 472
U.S. 797 CERTIORARI TO THE SUPREME COURT OF
KANSAS Syllabus During the 1970's, petitioner produced or purchased natural gas
from leased land located in 11 States. Respondents, royalty owners
possessing rights to leases from which petitioner produced the gas,
brought a class action against petitioner in a Kansas state court,
seeking to recover interest on royalty payments that had been
delayed by petitioner. The trial court certified a class consisting
of 33,000 royalty owners. Respondents provided each class member
with a notice by first-class mail describing the action and
informing each member that he could appear in person or by counsel,
that otherwise he would be represented by respondents, and that
class members would be included in the class and bound by the
judgment unless they "opted out" of the action by returning a
"request for exclusion." The final class consisted of some 28,000
members, who reside in all 50 States, the District of Columbia, and
several foreign countries. Notwithstanding that over 99% of the gas
leases in question and some 97% of the plaintiff class members had
no apparent connection to Kansas except for the lawsuit, the trial
court applied Kansas contract and equity law to every claim, and
found petitioner liable for interest on the suspended royalties to
all class members. The Kansas Supreme Court affirmed over
petitioner's contentions that the Due Process Clause of the
Fourteenth Amendment prevented Kansas from adjudicating the claims
of all the class members, and that that Clause and the Full Faith
and Credit Clause prohibited application of Kansas law to all of
the transactions between petitioner and the class members. Held: 1. Petitioner has standing to assert the claim that Kansas did
not have jurisdiction over the class members who were not Kansas
residents and had no connection to Kansas. Whether it wins or loses
on the merits, petitioner has a distinct and personal interest in
seeing the entire plaintiff class bound by res judicata just as petitioner is bound. The only way petitioner can assure
itself of this binding effect is to ascertain that the forum court
has jurisdiction over every plaintiff whose claim it seeks to
adjudicate, sufficient to support a res judicata defense
in a later suit by class members. The alleged injury petitioner
would incur if the class action judgment against it became final
without binding the plaintiff class is sufficient to give
petitioner standing on its own right to raise the jurisdiction
claim in this Court. Pp. 472 U. S.
803 -806. Page 472 U. S. 798 2. The Kansas trial court properly asserted personal
jurisdiction over the absent plaintiff class members and their
claims against petitioner. The Due Process Clause requires notice,
an opportunity to appear in person or by counsel, an opportunity to
"opt out," and adequate representation. It does not require that
absent class members affirmatively "opt in" to the class, rather
than be deemed members of the class if they did not "opt out." The
procedure followed by Kansas, where a fully descriptive notice is
sent by first-class mail to each class member, with an explanation
of the right to "opt out," satisfies due process. The interests of
the absent plaintiff class members are sufficiently protected by
the forum State when those plaintiffs are provided with a request
for exclusion that can be returned within a reasonable time to the
trial court. Pp. 472 U. S.
806 -814.

															3. The Kansas Supreme Court erred in deciding that the
application of Kansas law to all claims would be constitutional.
Kansas must have a "significant contact or aggregation of contacts"
to the claims asserted by each plaintiff class member in order to
ensure that the choice of Kansas law was not arbitrary or unfair.
Given Kansas' lack of "interest" in claims unrelated to that State,
and the substantive conflict between Kansas law and the law of
other States, such as Texas, where some of the leased land in
question is located, application of Kansas law to every claim in
this case was sufficiently arbitrary and unfair as to exceed
constitutional limits. Pp. 472 U. S. 814 -823.

															235 Kan.195, 679 P.2d 1159 , affirmed in part, reversed in part, and remanded. REHNQUIST, J., delivered the opinion of the Court, in which
BURGER, C.J., and BRENNAN, WHITE, MARSHALL, BLACKMUN, and O'CONNOR,
JJ., joined, and in Parts I and II of which STEVENS, J., joined.
STEVENS, J., filed an opinion concurring in part and dissenting in
part, post, p. 472 U. S. 823 .
POWELL, J., took no part in the decision of the case. Page 472 U. S. 799 JUSTICE REHNQUIST delivered the opinion of the Court.

															Petitioner is a Delaware corporation which has its principal
place of business in Oklahoma. During the 1970's it produced or
purchased natural gas from leased land located in 11 different
States, and sold most of the gas in interstate commerce.
Respondents are some 28,000 of the royalty owners possessing rights
to the leases from which petitioner produced the gas; they reside
in all 50 States, the District of Columbia, and several foreign
countries. Respondents brought a class action against petitioner in
the Kansas state court, seeking to recover interest on royalty
payments which had been delayed by petitioner. They recovered
judgment in the trial court, and the Supreme Court of Kansas
affirmed the judgment over petitioner's contentions that the Due
Process Clause of the Fourteenth Amendment prevented Kansas from
adjudicating the claims of all the respondents, and that the Due
Process Clause and the Full Faith and Credit Clause of Article IV
of the Constitution prohibited the application of Kansas law to all
of the transactions between petitioner and respondents. 235
Kan.195, 679 P.2d 1159 (1984). We granted certiorari to consider these claims. 469 U.S.
879 (1984). We reject petitioner's jurisdictional claim, but
sustain its claim regarding the choice of law.

															Because petitioner sold the gas to its customers in interstate
commerce, it was required to secure approval for price increases
from what was then the Federal Power Commission, and is now the
Federal Energy Regulatory Commission. Under its regulations, the
Federal Power Commission permitted petitioner to propose and
collect tentative higher gas prices, subject to final approval by
the Commission. If the Commission eventually denied petitioner's
proposed price increase or reduced the proposed increase,
petitioner would Page 472 U. S. 800 have to refund to its customers the difference between the
approved price and the higher price charged, plus interest at a
rate set by statute. See 18 CFR § 154.102 (1984).

															Although petitioner received higher gas prices pending review by
the Commission, petitioner suspended any increase in royalties paid
to the royalty owners because the higher price could be subject to
recoupment by petitioner's customers. Petitioner agreed to pay the
higher royalty only if the royalty owners would provide petitioner
with a bond or indemnity for the increase, plus interest, in case
the price increase was not ultimately approved and a refund was due
to the customers. Petitioner set the interest rate on the indemnity
agreements at the same interest rate the Commission would have
required petitioner to refund to its customers. A small percentage
of the royalty owners provided this indemnity and received
royalties immediately from the interim price increases; these
royalty owners are unimportant to this case.

															The remaining royalty owners received no royalty on the
unapproved portion of the prices until the Federal Power Commission
approval of those prices became final. Royalties on the unapproved
portion of the gas price were suspended three times by petitioner,
corresponding to its three proposed price increases in the
mid-1970's. In three written opinions, the Commission approved all
of petitioner's tentative price increases, so petitioner paid to
its royalty owners the suspended royalties of $3.7 million in 1976,
$4.7 million in 1977, and $2.9 million in 1978. Petitioner paid no
interest to the royalty owners although it had the use of the
suspended royalty money for a number of years.

															Respondents Irl Shutts, Robert Anderson, and Betty Anderson
filed suit against petitioner in Kansas state court, seeking
interest payments on their suspended royalties which petitioner had
possessed pending the Commission's approval of the price increases.
Shutts is a resident of Kansas, and the Andersons live in Oklahoma.
Shutts and the Andersons Page 472 U. S. 801 own gas leases in Oklahoma and Texas. Over petitioner's
objection the Kansas trial court granted respondents' motion to
certify the suit as a class action under Kansas law. Kan.Stat.Ann.
§ 60-223 et seq. (1983). The class as certified was
comprised of 33,000 royalty owners who had royalties suspended by
petitioner. The average claim of each royalty owner for interest on
the suspended royalties was $100.

															After the class was certified respondents provided each class
member with notice through first-class mail. The notice described
the action and informed each class member that he could appear in
person or by counsel; otherwise each member would be represented by
Shutts and the Andersons, the named plaintiffs. The notices also
stated that class members would be included in the class and bound
by the judgment unless they "opted out" of the lawsuit by executing
and returning a "request for exclusion" that was included with the
notice. The final class as certified contained 28, 100 members;
3,400 had "opted out" of the class by returning the request for
exclusion, and notice could not be delivered to another 1,500
members, who were also excluded. Less than 1,000 of the class
members resided in Kansas. Only a minuscule amount, approximately
one quarter of one percent, of the gas leases involved in the
lawsuit were on Kansas land.

															After petitioner's mandamus petition to decertify the class was
denied, Phillips Petroleum v. Duckworth, No. 82-54608
(Kan. June 28, 1982), cert. denied, 459 U.S. 1103 (1983),
the case was tried to the court. The court found petitioner liable
under Kansas law for interest on the suspended royalties to all
class members. The trial court relied heavily on an earlier,
unrelated class action involving the same nominal plaintiff and the
same defendant, Shutts, Executor v. Phillips Petroleum
Co., 222 Kan. 527, 567 P.2d 1292 (1977), cert. denied, 434 U.S. 1068 (1978). The Kansas
Supreme Court had held in Shutts, Executor that a gas
company owed interest to royalty owners for royalties suspended
pending final Commission approval of a price increase. No federal
statutes Page 472 U. S. 802 touched on the liability for suspended royalties, and the court
in Shutts, Executor held as a matter of Kansas equity law
that the applicable interest rates for computation of interest on
suspended royalties were the interest rates at which the gas
company would have had to reimburse its customers had its interim
price increase been rejected by the Commission. The court in Shutts, Executor viewed these as the fairest interest
rates because they were also the rates that petitioner required the
royalty owners to meet in their indemnity agreements in order to
avoid suspended royalties.

															The trial court in the present case applied the rule from Shutts, Executor, and held petitioner liable for
prejudgment and postjudgment interest on the suspended royalties,
computed at the Commission rates governing petitioner's three price
increases. See 18 CFR § 154.102 (1984). The applicable
interest rates were: 7% for royalties retained until October 1974;
9% for royalties retained between October 1974 and September 1979;
and thereafter at the average prime rate. The trial court did not
determine whether any difference existed between the laws of Kansas
and other States, or whether another State's laws should be applied
to non-Kansas plaintiffs or to royalties from leases in States
other than Kansas. 235 Kan. at 221, 679 P.2d at 1180.

															Petitioner raised two principal claims in its appeal to the
Supreme Court of Kansas. It first asserted that the Kansas trial
court did not possess personal jurisdiction over absent plaintiff
class members as required by International Shoe Co. v.
Washington, 326 U. S. 310 (1945), and similar cases. Related to this first claim was
petitioner's contention that the "opt-out" notice to absent class
members, which forced them to return the request for exclusion in
order to avoid the suit, was insufficient to bind class members who
were not residents of Kansas or who did not possess "minimum
contacts" with Kansas. Second, petitioner claimed that Kansas
courts could not apply Kansas law to every claim in the dispute.
The trial court should have looked to the laws of each State Page 472 U. S. 803 where the leases were located to determine, on the basis of
conflict of laws principles, whether interest on the suspended
royalties was recoverable, and at what rate.

															The Supreme Court of Kansas held that the entire cause of action
was maintainable under the Kansas class action statute, and the
court rejected both of petitioner's claims. 235 Kan.195, 679 P.2d 1159 (1984). First, it held that the absent class members were
plaintiffs, not defendants, and thus the traditional minimum
contacts test of International Shoe did not apply. The
court held that nonresident class action plaintiffs were only
entitled to adequate notice, an opportunity to be heard, an
opportunity to opt out of the case, and adequate representation by
the named plaintiffs. If these procedural due process minima were
met, according to the court, Kansas could assert jurisdiction over
the plaintiff class and bind each class member with a judgment on
his claim. The court surveyed the course of the litigation and
concluded that all of these minima had been met.

															The court also rejected petitioner's contention that Kansas law
could not be applied to plaintiffs and royalty arrangements having
no connection with Kansas. The court stated that generally the law
of the forum controlled all claims unless "compelling reasons"
existed to apply a different law. The court found no compelling
reasons, and noted that "[t]he plaintiff class members have
indicated their desire to have this action determined under the
laws of Kansas." 235 Kan. at 222, 679 P.2d at 1181. The court
affirmed as a matter of Kansas equity law the award of interest on
the suspended royalties, at the rates imposed by the trial court.
The court set the postjudgment interest rate on all claims at the
Kansas statutory rate of 15%. Id. at 224, 679 P.2d at
1183. I As a threshold matter we must determine whether petitioner has
standing to assert the claim that Kansas did not possess proper
jurisdiction over the many plaintiffs in the Page 472 U. S. 804 class who were not Kansas residents and had no connection to
Kansas. Respondents claim that a party generally may assert only
his own rights, and that petitioner has no standing to assert the
rights of its adversary, the plaintiff class, in order to defeat
the judgment in favor of the class.

															Standing to sue in any Article III court is, of course, a
federal question which does not depend on the party's prior
standing in state court. Doremus v. Board of Education, 342 U. S. 429 , 342 U. S. 434 (1952); Baker v. Carr, 369 U. S. 186 , 369 U. S. 204 (1962). Generally stated, federal standing requires an allegation
of a present or immediate injury in fact, where the party
requesting standing has "alleged such a personal stake in the
outcome of the controversy as to assure that concrete adverseness
which sharpens the presentation of issues." Ibid. There
must be some causal connection between the asserted injury and the
challenged action, and the injury must be of the type "likely to be
redressed by a favorable decision." Valley Forge Christian
College v. Americans United for Separation of Church and State,
Inc., 454 U. S. 464 , 454 U. S. 472 (1982). See Simon v. Eastern Kentucky Welfare Rights Org., 426 U. S. 26 , 426 U. S. 41 -42
(1976); Arlington Heights v. Metropolitan Housing Dev.
Corp., 429 U. S. 252 , 429 U. S. 261 (1977).

															Additional prudential limitations on standing may exist even
though the Article III requirements are met because

															"the judiciary seeks to avoid deciding questions of broad social
import where no individual rights would be vindicated and to limit
access to the federal courts to those litigants best suited to
assert a particular claim." Gladstone, Realtors v. Village of Bellwood, 441 U. S. 91 , 441 U. S. 99 -100
(1979). One of these prudential limits on standing is that a
litigant must normally assert his own legal interests rather than
those of third parties. See Singleton v. Wulff, 428 U. S. 106 (1976); Craig v. Boren, 429 U. S. 190 (1976).

															Respondents claim that petitioner is barred by the rule
requiring that a party assert only his own rights; they point out
that respondents and petitioner are adversaries and do Page 472 U. S. 805 not have allied interests such that petitioner would be a good
proponent of class members' interests. They further urge that
petitioner's interference is unneeded because the class members
have had opportunity to complain about Kansas' assertion of
jurisdiction over their claim, but none have done so. See
Singleton, supra, at 428 U. S.
113 -114.

															Respondents may be correct that petitioner does not possess
standing jus tertii, but this is not the issue. Petitioner
seeks to vindicate its own interests. As a class action defendant
petitioner is in a unique predicament. If Kansas does not possess
jurisdiction over this plaintiff class, petitioner will be bound to
28,100 judgment holders scattered across the globe, but none of
these will be bound by the Kansas decree. Petitioner could be
subject to numerous later individual suits by these class members
because a judgment issued without proper personal jurisdiction over
an absent party is not entitled to full faith and credit elsewhere
and thus has no res judicata effect as to that party.
Whether it wins or loses on the merits, petitioner has a distinct
and personal interest in seeing the entire plaintiff class bound by res judicata just as petitioner is bound. The only way a
class action defendant like petitioner can assure itself of this
binding effect of the judgment is to ascertain that the forum court
has jurisdiction over every plaintiff whose claim it seeks to
adjudicate, sufficient to support a defense of res
judicata in a later suit for damages by class members.

															While it is true that a court adjudicating a dispute may not be
able to predetermine the res judicata effect of its own
judgment, petitioner has alleged that it would be obviously and
immediately injured if this class action judgment against it became
final without binding the plaintiff class. We think that such an
injury is sufficient to give petitioner standing on its own right
to raise the jurisdiction claim in this Court.

															Petitioner's posture is somewhat similar to the trust settlor
defendant in Hanson v. Denckla, 357 U.
S. 235 (1958), who we found to have standing to
challenge the forum's personal Page 472 U. S. 806 jurisdiction over an out-of-state trust company which was an
indispensable party under the forum State's law. Because the court
could not proceed with the action without jurisdiction over the
trust company, we observed that

															"any defendant affected by the court's judgment ha[d] that
'direct and substantial personal interest in the outcome' that is
necessary to challenge whether that jurisdiction was in fact
acquired." Id. at 357 U. S. 245 , quoting Chicago v. Atchison, T. & S. F. R. Co., 357 U. S. 77 (1958). II Reduced to its essentials, petitioner's argument is that unless
out-of-state plaintiffs affirmatively consent, the Kansas courts
may not exert jurisdiction over their claims. Petitioner claims
that failure to execute and return the "request for exclusion"
provided with the class notice cannot constitute consent of the
out-of-state plaintiffs; thus Kansas courts may exercise
jurisdiction over these plaintiffs only if the plaintiffs possess
the sufficient "minimum contacts" with Kansas as that term is used
in cases involving personal jurisdiction over out-of-state
defendants. E.g., International Shoe Co. v. Washington, 326 U. S. 310 (1945); Shaffer v. Heitner, 433 U.
S. 186 (1977); World-Wide Volkswagen Corp. v.
Woodson, 444 U. S. 286 (1980). Since Kansas had no pre-litigation contact with many of the
plaintiffs and leases involved, petitioner claims that Kansas has
exceeded its jurisdictional reach and thereby violated the due
process rights of the absent plaintiffs.

															In International Shoe we were faced with an
out-of-state corporation which sought to avoid the exercise of
personal jurisdiction over it as a defendant by a Washington state
court. We held that the extent of the defendant's due process
protection would depend "upon the quality and nature of the
activity in relation to the fair and orderly administration of the
laws. . . ." 326 U.S. at 326 U. S. 319 .
We noted that the Due Process Clause did not permit a State to make
a binding judgment against a person with whom the State had no
contacts, Page 472 U. S. 807 ties, or relations. Ibid. If the defendant possessed
certain minimum contacts with the State, so that it was "reasonable
and just, according to our traditional conception of fair play and
substantial justice" for a State to exercise personal jurisdiction,
the State could force the defendant to defend himself in the forum,
upon pain of default, and could bind him to a judgment. Id. at 326 U. S.
320 .

															The purpose of this test, of course, is to protect a defendant
from the travail of defending in a distant forum, unless the
defendant's contacts with the forum make it just to force him to
defend there. As we explained in Woodson, supra, the
defendant's contacts should be such that "he should reasonably
anticipate being haled" into the forum. 444 U.S. at 444 U. S. 297 .
In Insurance Corp. of Ireland v. Compagnie des Bauxites de
Guinee, 456 U. S. 694 , 456 U. S.
702 -703, and n. 10 (1982), we explained that the
requirement that a court have personal jurisdiction comes from the
Due Process Clause's protection of the defendant's personal liberty
interest, and said that the requirement "represents a restriction
on judicial power not as a matter of sovereignty, but as a matter
of individual liberty." (Footnote omitted.)

															Although the cases like Shaffer and Woodson which petitioner relies on for a minimum contacts requirement all
dealt with out-of-state defendants or parties in the procedural
posture of a defendant, cf. New York Life Ins. Co. v.
Dunlevy, 241 U. S. 518 (1916); Estin v. Estin, 334 U. S. 541 (1948), petitioner claims that the same analysis must apply to
absent class action plaintiffs. In this regard petitioner correctly
points out that a chose in action is a constitutionally recognized
property interest possessed by each of the plaintiffs. Mullane
v. Central Hanover Bank & Trust Co., 339 U.
S. 306 (1950). An adverse judgment by Kansas courts in
this case may extinguish the chose in action forever through res judicata. Such an adverse judgment, petitioner claims,
would be every bit as onerous to an absent plaintiff as an adverse
judgment on the merits would be to a defendant. Page 472 U. S. 808 Thus, the same due process protections should apply to absent
plaintiffs: Kansas should not be able to exert jurisdiction over
the plaintiffs' claims unless the plaintiffs have sufficient
minimum contacts with Kansas.

															We think petitioner's premise is in error. The burdens placed by
a State upon an absent class action plaintiff are not of the same
order or magnitude as those it places upon an absent defendant. An
out-of-state defendant summoned by a plaintiff is faced with the
full powers of the forum State to render judgment against it. The defendant must generally hire counsel and travel to the
forum to defend itself from the plaintiff's claim, or suffer a
default judgment. The defendant may be forced to participate in
extended and often costly discovery, and will be forced to respond
in damages or to comply with some other form of remedy imposed by
the court should it lose the suit. The defendant may also face
liability for court costs and attorney's fees. These burdens are
substantial, and the minimum contacts requirement of the Due
Process Clause prevents the forum State from unfairly imposing them
upon the defendant.

															A class action plaintiff, however, is in quite a different
posture. The Court noted this difference in Hansberry v.
Lee, 311 U. S. 32 , 311 U. S. 40 -41
(1940), which explained that a "class" or "representative" suit was
an exception to the rule that one could not be bound by judgment in personam unless one was made fully a party in the
traditional sense. Ibid., citing Pennoyer v. Neff, 95 U. S. 714 (1878). As the Court pointed out in Hansberry, the class
action was an invention of equity to enable it to proceed to a
decree in suits where the number of those interested in the
litigation was too great to permit joinder. The absent parties
would be bound by the decree so long as the named parties
adequately represented the absent class and the prosecution of the
litigation was within the common interest. [ Footnote 1 ] 311 U.S. at 311 U. S.
41 . Page 472 U. S. 809 Modern plaintiff class actions follow the same goals, permitting
litigation of a suit involving common questions when there are too
many plaintiffs for proper joinder. Class actions also may permit
the plaintiffs to pool claims which would be uneconomical to
litigate individually. For example, this lawsuit involves claims
averaging about $100 per plaintiff; most of the plaintiffs would
have no realistic day in court if a class action were not
available.

															In sharp contrast to the predicament of a defendant haled into
an out-of-state forum, the plaintiffs in this suit were not haled
anywhere to defend themselves upon pain of a default judgment. As
commentators have noted, from the plaintiffs' point of view a class
action resembles a "quasi-administrative proceeding, conducted by
the judge." 3B J. Moore & J. Kennedy, Moore's Federal Practice
�23.45 [4.-5] (1984); Kaplan, Continuing Work of the Civil
Committee: 1966 Amendments to the Federal Rules of Civil Procedure
(1), 81 Harv.L.Rev. 356, 398 (1967).

															A plaintiff class in Kansas and numerous other jurisdictions
cannot first be certified unless the judge, with the aid of the
named plaintiffs and defendant, conducts an inquiry into the common
nature of the named plaintiffs' and the absent plaintiffs' claims,
the adequacy of representation, the jurisdiction possessed over the
class, and any other matters that will bear upon proper
representation of the absent plaintiffs' interest. See,
e.g., Kan.Stat.Ann. § 60-223 (1983); Fed.Rule Civ.Proc. 23.
Unlike a defendant in a civil suit, a class action plaintiff is not
required to fend for himself. See Kan.Stat.Ann. §
60-223(d) (1983). The court and named plaintiffs protect his
interests. Indeed, the class action defendant itself has a great
interest in ensuring that the absent plaintiffs' claims are
properly before the forum. In this case, for Page 472 U. S. 810 example, the defendant sought to avoid class certification by
alleging that the absent plaintiffs would not be adequately
represented and were not amenable to jurisdiction. See Phillips
Petroleum v. Duckworth, No. 82-54608 (Kan. June 28, 1982).

															The concern of the typical class action rules for the absent
plaintiffs is manifested in other ways. Most jurisdictions,
including Kansas, require that a class action, once certified, may
not be dismissed or compromised without the approval of the court.
In many jurisdictions such as Kansas the court may amend the
pleadings to ensure that all sections of the class are represented
adequately. Kan.Stat.Ann. § 60223(d) (1983); see also,
e.g., Fed.Rule Civ.Proc. 23(d).

															Besides this continuing solicitude for their rights, absent
plaintiff class members are not subject to other burdens imposed
upon defendants. They need not hire counsel or appear. They are
almost never subject to counterclaims or cross-claims, or liability
for fees or costs. [ Footnote 2 ]
Absent plaintiff class members are not subject to coercive or
punitive remedies. Nor will an adverse judgment typically bind an
absent plaintiff for any damages, although a valid adverse judgment
may extinguish any of the plaintiff's claims which were
litigated.

															Unlike a defendant in a normal civil suit, an absent class
action plaintiff is not required to do anything. He may sit back
and allow the litigation to run its course, content in knowing that
there are safeguards provided for his protection. In most class
actions an absent plaintiff is provided at least with an
opportunity to "opt out" of the class, and if he takes advantage of
that opportunity he is removed from the Page 472 U. S. 811 litigation entirely. This was true of the Kansas proceedings in
this case. The Kansas procedure provided for the mailing of a
notice to each class member by first-class mail. The notice, as we
have previously indicated, described the action and informed the
class member that he could appear in person or by counsel, in
default of which he would be represented by the named plaintiffs
and their attorneys. The notice further stated that class members
would be included in the class and bound by the judgment unless
they "opted out" by executing and returning a "request for
exclusion" that was included in the notice.

															Petitioner contends, however, that the "opt out" procedure
provided by Kansas is not good enough, and that an "opt in"
procedure is required to satisfy the Due Process Clause of the
Fourteenth Amendment. Insofar as plaintiffs who have no minimum
contacts with the forum State are concerned, an "opt in" provision
would require that each class member affirmatively consent to his
inclusion within the class.

															Because States place fewer burdens upon absent class plaintiffs
than they do upon absent defendants in nonclass suits, the Due
Process Clause need not and does not afford the former as much
protection from state court jurisdiction as it does the latter. The
Fourteenth Amendment does protect "persons," not "defendants,"
however, so absent plaintiffs as well as absent defendants are
entitled to some protection from the jurisdiction of a forum State
which seeks to adjudicate their claims. In this case we hold that a
forum State may exercise jurisdiction over the claim of an absent
class action plaintiff, even though that plaintiff may not possess
the minimum contacts with the forum which would support personal
jurisdiction over a defendant. If the forum State wishes to bind an
absent plaintiff concerning a claim for money damages or similar
relief at law, [ Footnote 3 ] it
must provide minimal Page 472 U. S. 812 procedural due process protection. The plaintiff must receive
notice plus an opportunity to be heard and participate in the
litigation, whether in person or through counsel. The notice must
be the best practicable,

															"reasonably calculated, under all the circumstances, to apprise
interested parties of the pendency of the action and afford them an
opportunity to present their objections." Mullane, 339 U.S. at 399 U. S.
314 -315; cf. Eisen v. Carlisle & Jacquelin, 417 U. S. 156 , 417 U. S.
174 -175 (1974). The notice should describe the action
and the plaintiffs' rights in it. Additionally, we hold that due
process requires at a minimum that an absent plaintiff be provided
with an opportunity to remove himself from the class by executing
and returning an "opt out" or "request for exclusion" form to the
court. Finally, the Due Process Clause of course requires that the
named plaintiff at all times adequately represent the interests of
the absent class members. Hansberry, 311 U.S. at 311 U. S. 42 -43,
45.

															We reject petitioner's contention that the Due Process Clause of
the Fourteenth Amendment requires that absent plaintiffs
affirmatively "opt in" to the class, rather than be deemed members
of the class if they do not "opt out." We think that such a
contention is supported by little, if any precedent, and that it
ignores the differences between class action plaintiffs, on the one
hand, and defendants in nonclass civil suits on the other. Any
plaintiff may consent to jurisdiction. Keeton v. Hustler
Magazine, Inc., 465 U. S. 770 (1984). The essential question, then, is how stringent the
requirement for a showing of consent will be.

															We think that the procedure followed by Kansas, where a fully
descriptive notice is sent first-class mail to each class member,
with an explanation of the right to "opt out," satisfies due
process. Requiring a plaintiff to affirmatively Page 472 U. S. 813 request inclusion would probably impede the prosecution of those
class actions involving an aggregation of small individual claims,
where a large number of claims are required to make it economical
to bring suit. See, e.g., Eisen, supra, at 417 U. S. 161 .
The plaintiff's claim may be so small, or the plaintiff so
unfamiliar with the law, that he would not file suit individually,
nor would he affirmatively request inclusion in the class if such a
request were required by the Constitution. [ Footnote 4 ] If, on the other hand, the plaintiff's
claim is sufficiently large or important that he wishes to litigate
it on his own, he will likely have retained an attorney or have
thought about filing suit, and should be fully capable of
exercising his right to "opt out."

															In this case over 3,400 members of the potential class did "opt
out," which belies the contention that "opt out" procedures result
in guaranteed jurisdiction by inertia. Another 1,500 were excluded
because the notice and "opt out" form was undeliverable. We think
that such results show that the "opt out" procedure provided by
Kansas is by no means pro forma, and that the Constitution
does not require more to protect what must be the somewhat rare
species of class member who is unwilling to execute an "opt out"
form, but whose claim is nonetheless so important that he cannot be
presumed to consent to being a member of the class by his failure
to do so. Petitioner's "opt in" requirement would require the
invalidation of scores of state statutes and of the class action
provision of the Federal Rules of Civil Procedure, [ Footnote 5 ] Page 472 U. S. 814 and for the reasons stated we do not think that the Constitution
requires the State to sacrifice the obvious advantages in judicial
efficiency resulting from the "opt out" approach for the protection
of the raris avis portrayed by petitioner.

															We therefore hold that the protection afforded the plaintiff
class members by the Kansas statute satisfies the Due Process
Clause. The interests of the absent plaintiffs are sufficiently
protected by the forum State when those plaintiffs are provided
with a request for exclusion that can be returned within a
reasonable time to the court. See Insurance Corp. of
Ireland, 456 U.S. at 456 U. S.
702 -703, and n. 10. Both the Kansas trial court and the
Supreme Court of Kansas held that the class received adequate
representation, and no party disputes that conclusion here. We
conclude that the Kansas court properly asserted personal
jurisdiction over the absent plaintiffs and their claims against
petitioner. III The Kansas courts applied Kansas contract and Kansas equity law
to every claim in this case, notwithstanding that Page 472 U. S. 815 over 99% of the gas leases and some 97% of the plaintiffs in the
case had no apparent connection to the State of Kansas except for
this lawsuit. [ Footnote 6 ]
Petitioner protested that the Kansas Page 472 U. S. 816 courts should apply the laws of the States where the leases were
located, or at least apply Texas and Oklahoma law because so many
of the leases came from those States. The Kansas courts disregarded
this contention and found petitioner liable for interest on the
suspended royalties as a matter of Kansas law, and set the interest
rates under Kansas equity principles.

															Petitioner contends that total application of Kansas substantive
law violated the constitutional limitations on choice of law
mandated by the Due Process Clause of the Fourteenth Amendment and
the Full Faith and Credit Clause of Article IV, § 1. We must first
determine whether Kansas law conflicts in any material way with any
other law which could apply. There can be no injury in applying
Kansas law if it is not in conflict with that of any other
jurisdiction connected to this suit.

															Petitioner claims that Kansas law conflicts with that of a
number of States connected to this litigation, especially Texas and
Oklahoma. These putative conflicts range from the direct to the
tangential, and may be addressed by the Supreme Court of Kansas on
remand under the correct constitutional standard. For example,
there is no recorded Page 472 U. S. 817 Oklahoma decision dealing with interest liability for suspended
royalties: whether Oklahoma is likely to impose liability would
require a survey of Oklahoma oil and gas law. Even if Oklahoma
found such liability, petitioner shows that Oklahoma would most
likely apply its constitutional and statutory 6% interest rate
rather than the much higher Kansas rates applied in this
litigation. Okla.Const., Art XIV, § 2; Okla.Stat., Tit. 15, § 266
(Supp.1984-1985); Rendezvous Trails of America, Inc. v.
Ayers, 612 P.2d
1384 , 1385 (Okla. App.1980); Smith v.
Robinson, 594 P.2d 364 (Okla.1979); West Edmond Hunton Lime Unit v.
Young, 325 P.2d 1047 (Okla.1958).

															Additionally, petitioner points to an Oklahoma statute which
excuses liability for interest if a creditor accepts payment of the
full principal without a claim for interest, Okla.Stat., Tit. 23, §
8 (1951). Cf. Webster Drilling Co. v. Sterling Oil of Oklahoma,
Inc., 376 P.2d 236 (Okla.1962). Petitioner contends that by ignoring this statute the
Kansas courts created liability that does not exist in
Oklahoma.

															Petitioner also points out several conflicts between Kansas and
Texas law. Although Texas recognizes interest liability for
suspended royalties, Texas has never awarded any such interest at a
rate greater than 6%, which corresponds with the Texas
constitutional and statutory rate. [ Footnote 7 ] Tex.Const., Art. 16, § 11;
Tex.Rev.Civ.Stat.Ann., Art. 5069-1.03 (Vernon 1971). See
Phillips Petroleum Co. v. Stahl Petroleum Co., 569 S.W.2d 480 (Tex.1978); Phillips Petroleum Co. v. Adams, 513 F.2d 355
(CA5), cert. denied, 423 U.S. 930 (1975); cf. Maxey v.
Texas Commerce Bank, 580 S.W.2d 340 ,
341 (Tex.1979). Moreover, at least one court interpreting Texas law
appears to have held that Texas excuses interest Page 472 U. S. 818 liability once the gas company offers to take an indemnity from
the royalty owner and pay him the suspended royalty while the price
increase is still tentative. Phillips Petroleum Co. v.
Riverside Gas Compression Co., 409 F.
Supp. 486 , 495-496 (ND Tex.1976). Such a rule is contrary to
Kansas law as applied below, but if applied to the Texas plaintiffs
or leases in this case, would vastly reduce petitioner's
liability.

															The conflicts on the applicable interest rates, alone -- which
we do not think can be labeled "false conflicts" without a more
thoroughgoing treatment than was accorded them by the Supreme Court
of Kansas -- certainly amounted to millions of dollars in
liability. We think that the Supreme Court of Kansas erred in
deciding on the basis that it did that the application of its laws
to all claims would be constitutional.

															Four Terms ago we addressed a similar situation in Allstate
Ins. Co. v. Hague, 449 U. S. 302 (1981). In that case we were confronted with two conflicting rules
of state insurance law. Minnesota permitted the "stacking" of
separate uninsured motorist policies while Wisconsin did not.
Although the decedent lived in Wisconsin, took out insurance
policies and was killed there, he was employed in Minnesota, and
after his death his widow moved to Minnesota for reasons unrelated
to the litigation, and was appointed personal representative of his
estate. She filed suit in Minnesota courts, which applied the
Minnesota stacking rule.

															The plurality in Allstate noted that a particular set
of facts giving rise to litigation could justify, constitutionally,
the application of more than one jurisdiction's laws. The plurality
recognized, however, that the Due Process Clause and the Full Faith
and Credit Clause provided modest restrictions on the application
of forum law. These restrictions required

															"that for 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." Id. at 449 U. S.
312 -313. The Page 472 U. S. 819 dissenting Justices were in substantial agreement with this
principle. Id. at 449 U. S. 332 (opinion of POWELL, J., joined by BURGER,
C.J., and REHNQUIST, J.). The dissent stressed that the Due Process
Clause prohibited the application of law which was only casually or
slightly related to the litigation, while the Full Faith and Credit
Clause required the forum to respect the laws and judgments of
other States, subject to the forum's own interests in furthering
its public policy. Id. at 449 U. S.
335 -336.

															The plurality in Allstate affirmed the application of
Minnesota law because of the forum's significant contacts to the
litigation which supported the State's interest in applying its
law. See id. at 449 U. S.
313 -329. Kansas' contacts to this litigation, as
explained by the Kansas Supreme Court, can be gleaned from the
opinion below.

															Petitioner owns property and conducts substantial business in
the State, so Kansas certainly has an interest in regulating
petitioner's conduct in Kansas. 235 Kan. at 210, 679 P.2d at 1174.
Moreover, oil and gas extraction is an important business to
Kansas, and although only a few leases in issue are located in
Kansas, hundreds of Kansas plaintiffs were affected by petitioner's
suspension of royalties; thus the court held that the State has a
real interest in protecting "the rights of these royalty owners
both as individual residents of [Kansas] and as members of this
particular class of plaintiffs." Id. at 211-212, 679 P.2d
at 1174. The Kansas Supreme Court pointed out that Kansas courts
are quite familiar with this type of lawsuit, and "[t]he plaintiff
class members have indicated their desire to have this action
determined under the laws of Kansas." Id. at 211, 222, 679
P.2d at 1174, 1181. Finally, the Kansas court buttressed its use of
Kansas law by stating that this lawsuit was analogous to a suit
against a "common fund" located in Kansas. Id. at 201,
211-212, 679 P.2d at 1168, 1174.

															We do not lightly discount this description of Kansas' contacts
with this litigation and its interest in applying its law. There
is, however, no "common fund" located in Kansas that Page 472 U. S. 820 would require or support the application of only Kansas law to
all these claims. See, e.g., Hartford Life Ins. Co. v.
Ibs, 237 U. S. 662 (1915). As the Kansas court noted, petitioner commingled the
suspended royalties with its general corporate accounts. 235 Kan.
at 201, 679 P.2d at 1168. There is no specific identifiable res in Kansas, nor is there any limited amount which may
be depleted before every plaintiff is compensated. Only by somehow
aggregating all the separate claims in this case could a "common
fund" in any sense be created, and the term becomes all but
meaningless when used in such an expansive sense.

															We also give little credence to the idea that Kansas law should
apply to all claims because the plaintiffs, by failing to opt out,
evinced their desire to be bound by Kansas law. Even if one could
say that the plaintiffs "consented" to the application of Kansas
law by not opting out, plaintiff's desire for forum law is rarely,
if ever controlling. In most cases, the plaintiff shows his obvious
wish for forum law by filing there.

															"If a plaintiff could choose the substantive rules to be applied
to an action . . . the invitation to forum shopping would be
irresistible." Allstate, supra, at 449 U. S. 337 (opinion of POWELL, J.). Even if a plaintiff evidences his desire
for forum law by moving to the forum, we have generally accorded
such a move little or no significance. John Hancock Mut. Life
Ins. Co. v. Yates, 299 U. S. 178 , 299 U. S. 182 (1936); Home Ins. Co. v. Dick, 281 U.
S. 397 , 281 U. S. 408 (1930). In Allstate, the plaintiff's move to the forum was
only relevant because it was unrelated and prior to the litigation.
449 U.S. at 449 U. S.
318 -319. Thus, the plaintiffs' desire for Kansas law,
manifested by their participation in this Kansas lawsuit, bears
little relevance.

															The Supreme Court of Kansas, in its opinion in this case,
expressed the view that, by reason of the fact that it was
adjudicating a nationwide class action, it had much greater
latitude in applying its own law to the transactions in question
than might otherwise be the case: Page 472 U. S. 821 "The general rule is that the law of the forum applies unless it
is expressly shown that a different law governs, and in case of
doubt, the law of the forum is preferred. . . . Where a state court
determines it has jurisdiction over a nationwide class action and
procedural due process guarantees of notice and adequate
representation are present, we believe the law of the forum should
be applied unless compelling reasons exist for applying a different
law. . . . Compelling reasons do not exist to require this court to
look to other state laws to determine the rights of the parties
involved in this lawsuit."

															235 Kan. at 221-222, 679 P.2d at 1181.

															We think that this is something of a "bootstrap" argument. The
Kansas class action statute, like those of most other
jurisdictions, requires that there be "common issues of law or
fact." But while a State may, for the reasons we have previously
stated, assume jurisdiction over the claims of plaintiffs whose
principal contacts are with other States, it may not use this
assumption of jurisdiction as an added weight in the scale when
considering the permissible constitutional limits on choice of
substantive law. It may not take a transaction with little or no
relationship to the forum and apply the law of the forum in order
to satisfy the procedural requirement that there be a "common
question of law." The issue of personal jurisdiction over
plaintiffs in a class action is entirely distinct from the question
of the constitutional limitations on choice of law; the latter
calculus is not altered by the fact that it may be more difficult
or more burdensome to comply with the constitutional limitations
because of the large number of transactions which the State
proposes to adjudicate and which have little connection with the
forum.

															Kansas must have a "significant contact or significant
aggregation of contacts" to the claims asserted by each member of
the plaintiff class, contacts "creating state interests," in order
to ensure that the choice of Kansas law is not arbitrary Page 472 U. S. 822 or unfair. Allstate, 449 U.S. at 449 U. S.
312 -313. Given Kansas' lack of "interest" in claims
unrelated to that State, and the substantive conflict with
jurisdictions such as Texas, we conclude that application of Kansas
law to every claim in this case is sufficiently arbitrary and
unfair as to exceed constitutional limits. [ Footnote 8 ]

															When considering fairness in this context, an important element
is the expectation of the parties. See Allstate, supra, at 449 U. S. 333 (opinion of POWELL, J.). There is no indication that, when the
leases involving land and royalty owners outside of Kansas were
executed, the parties had any idea that Kansas law would control.
Neither the Due Process Clause nor the Full Faith and Credit Clause
requires Kansas "to substitute for its own [laws], applicable to
persons and events within it, the conflicting statute of another
state," Pacific Employees Ins. Co. v. Industrial Accident
Comm'n, 306 U. S. 493 , 306 U. S. 502 (1939), but Kansas "may not abrogate the rights of parties beyond
its borders having no relation to anything done or to be done
within them." Home Ins. Co. v. Dick, supra, at 281 U. S.
410 .

															Here the Supreme Court of Kansas took the view that in a
nationwide class action where procedural due process guarantees Page 472 U. S. 823 of notice and adequate representation were met, "the law of the
forum should be applied unless compelling reasons exist for
applying a different law." 235 Kan. at 221, 679 P.2d at 1181.
Whatever practical reasons may have commended this rule to the
Supreme Court of Kansas, for the reasons already stated we do not
believe that it is consistent with the decisions of this Court. We
make no effort to determine for ourselves which law must apply to
the various transactions involved in this lawsuit, and we reaffirm
our observation in Allstate that in many situations a
state court may be free to apply one of several choices of law. But
the constitutional limitations laid down in cases such as Allstate and Home Ins. Co. v. Dick, supra, must
be respected even in a nationwide class action.

															We therefore affirm the judgment of the Supreme Court of Kansas
insofar as it upheld the jurisdiction of the Kansas courts over the
plaintiff class members in this case, and reverse its judgment
insofar as it held that Kansas law was applicable to all of the
transactions which it sought to adjudicate. We remand the case to
that court for further proceedings not inconsistent with this
opinion. It is so ordered. JUSTICE POWELL took no part in the decision of this case.

															[ Footnote 1 ]

															The holding in Hansberry, of course, was that
petitioners in that case had not a sufficient common interest with
the parties to a prior lawsuit such that a decree against those
parties in the prior suit would bind the petitioners. But in the
present case there is no question that the named plaintiffs
adequately represent the class, and that all members of the class
have the same interest in enforcing their claims against the
defendant.

															[ Footnote 2 ]

															Petitioner places emphasis on the fact that absent class members
might be subject to discovery, counterclaims, cross-claims, or
court costs. Petitioner cites no cases involving any such
imposition upon plaintiffs, however. We are convinced that such
burdens are rarely imposed upon plaintiff class members, and that
the disposition of these issues is best left to a case which
presents them in a more concrete way.

															[ Footnote 3 ]

															Our holding today is limited to those class actions which seek
to bind known plaintiffs concerning claims wholly or predominately
for money judgments. We intimate no view concerning other types of
class actions, such as those seeking equitable relief. Nor, of
course, does our discussion of personal jurisdiction address class
actions where the jurisdiction is asserted against a defendant class.

															[ Footnote 4 ]

															In this regard the Reporter for the 1966 amendments to the
Federal Rules of Civil Procedure stated:

															"[R]equiring the individuals affirmatively to request inclusion
in the lawsuit would result in freeing out the claims of people
especially small claims held by small people -- who for one reason
or another, ignorance, timidity, unfamiliarity with business or
legal matters, will simply not take the affirmative step."

															Kaplan, Continuing Work of the Civil Committee: 1966 Amendments
of the Federal Rules of Civil Procedure (I), 81 Harv.L.Rev. 356,
397-398 (1967).

															[ Footnote 5 ]

															The following statutes or procedural rules permit "opt out"
notice in some types of class actions:

															Rule Civ.Proc. 23(c)(2)(A); Ariz. Rule Civ.Proc. 23(c)(2)(A);
Cal.Civ.Code Ann. § 1781(e)(1) (West 1973) (consumer class action);
Colo.Rule Civ.Proc. 23(c)(2)(A); Del.Ch.Ct. Rule 23(c)(2)(A);
D.C.Super.Ct. Rule Civ.Proc. 23(c)(2)(A); Fla.Rule Civ.Proc.
1.220(d)(2)(A); Idaho Rule Civ.Proc. 23(c)(2)(A); Ind.Rule Trial
Proc. 23(C)(2)(A); Iowa Rule Civ.Proc. 42.8(b); Kan.Stat.Ann. §
60-223(c)(2) (1983); Ky. Rule Civ.Proc. 23.03(2)(a); Me.Rule
Civ.Proc. 23(c)(2)(A); Md.Rule Civ.Proc. 2-231(e)(1); Mich.Ct.Rule
3.501(C 5)(b); Minn.Rule Civ.Proc. 23.03 (2)(A); Mo. Rule Civ.Proc.
52.08; Mont. Rule Civ.Proc. 23(c)(2)(A); Nev.Rule Civ.Proc.
23(c)(2)(A); N.J.Civ.Prac.Rule 4:32-2; N.Y.Civ.Prac.Law § 904
(McKinney 1976); N.D.Rule Civ.Proc. 23(g)(2)(B); Ohio Rule
Civ.Proc. 23(C)(2)(a); Okla Stat., Tit. 12, § 2023(C)(2)(a)
(Supp.19841985); Ore.Rule Civ.Proc. 32F(1)(b)(ii); Pa.Rule
Civ.Proc. 1711(a); Tenn.Rule Civ.Proc. 23.03(2)(a); Vt.Rule
Civ.Proc. 23(c)(2)(A); Wash.Ct. Rule 23(C)(2)(i); Wyo. Rule
Civ.Proc. 23(c)(2)(A).

															[ Footnote 6 ]

															The Commission approved petitioner's price increases in Opinion
Nos. 699, 749, and 770. Petitioner reimbursed royalty owners $3.7,
$2.9, and $4.7 million in suspended royalties, respectively. The
States where the leases were located and their resident plaintiffs
are as follows. OPINION 699 --------------------------------------------------------

															No. leases Royalties to No. Royalty

															States in state states leases owners in state

															--------------------------------------------------------

															Oklahoma 1,266 $ 83,711.35 2,653

															Texas 4,414 839,152.73 9,591

															Kansas 3 152.88 496

															Arkansas 6 3,228.22 173

															Louisiana 68 2,187,548.06 1,244

															New Mexico 941 433,574.85 621

															Illinois ---- ---- 397

															Wyoming 690 148,906.93 413

															Mississippi ---- ---- 67

															Utah ---- ---- 29

															West Virginia ---- ---- 20

															No State Code 1 [.05] 1,205

															----- -------

															7,389 $3,696,274.97 OPINION 749 --------------------------------------------------------

															No. leases Royalties to No. Royalty

															States in state states leases owners in state

															--------------------------------------------------------

															Oklahoma 1,948 $ 243,163.49 3,591

															Texas 3,479 2,171,217.36 7,881

															Kansas 15 2,619.24 553

															Arkansas 32 1,769.33 171

															Louisiana 178 352,539.45 740

															New Mexico 350 22,670.27 339

															Illinois 1 1.30 357

															Wyoming 68 65,570.01 37

															Mississippi 3 694.93 88

															Utah 1 184.60 18

															West Virginia 32 10,364.61 246

															No State Code 2 1,032.59 1,553

															----- -------

															6,109 $2,873,827.18 OPINION 770 --------------------------------------------------------

															No. leases Royalties to No. Royalty

															States in state states leases owners in state

															--------------------------------------------------------

															Oklahoma 1,430 $ 471,122.53 2,684

															Texas 3,702 2,615,744.46 8,550

															Kansas 4 115.10 504

															Arkansas 2 552.83 162

															Louisiana 26 516,248.13 361

															New Mexico 591 194,799.95 469

															Illinois 1 .01 353

															Wyoming 476 945,441.09 272

															Mississippi ---- ---- 36

															Utah ---- ---- 18

															West Virginia ---- ---- 22

															No State Code ---- ---- 1,046

															----- -------

															6,232 $4,744,024.10

															[ Footnote 7 ]

															The Kansas interest rate also conflicts with the rate which is
applicable in Louisiana. At the time this suit was filed that rate
was 7%. See La.Civ.Code Ann., Art. 1938 (1977) (amended in
1982); Wurzlow v. Placid Oil Co., 279 So. 2d 749, 772-774
(La.App.1973) (applying Art.1938 to oil and gas royalties).

															[ Footnote 8 ]

															In this case the Kansas Supreme Court held that

															"[t]he trial court did not determine whether any difference
existed between the laws of Kansas and other states or whether
another state's law should be applied."

															235 Kan.195, 221, 679 P.2d 1159 ,
1180 (1984). Respondents contend that the trial court and the
Supreme Court actually incorporated by reference the opinion in Shutts, Executor, 222 Kan. 527, 567 P.2d
1292 (1977), where the court looked to the Texas and Oklahoma
interest rate statutes and found them inapplicable. We do not think
that the Kansas Supreme Court fully adopted the choice-of-law
discussion in Shutts, Executor as its holding in this
case. But even if we agreed that Shutts, Executor was
somehow incorporated below, that would be insufficient. Shutts,
Executor was a pre Allstate case involving only 2
other States, rather than the 10 present here. Moreover, the gas
region involved in Shutts, Executor was primarily within
Kansas borders. Shutts, Executor only considered the
conflict involving interest rate liability and state statutes, and
in finding the 6% Texas rate inapplicable it cited but did not
follow contrary Texas precedent. 222 Kan. at 562-565, 567 P.2d at
1317-1319.

															JUSTICE STEVENS, concurring in part and dissenting in part.

															For the reasons stated in Parts I and II of the Court's opinion,
I agree that the Kansas courts properly exercised jurisdiction over
this class action. I also recognize that the use of the word
"compelling" in a portion of the Kansas Supreme Court's opinion,
when read out of context, may create an inaccurate impression of
that court's choice-of-law holding. See ante at 472 U. S. 821 .
Our job, however, is to review judgments, not to edit opinions, and
I am firmly convinced that there is no constitutional defect in the
judgment under review.

															As the Court recognizes, there "can be no [constitutional]
injury in applying Kansas law if it is not in conflict with
that Page 472 U. S. 824 of any other jurisdiction connected to this suit." Ante at 472 U. S. 816 .
A fair reading of the Kansas Supreme Court's opinion in light of
its earlier opinion in Shutts v. Phillips Petroleum Co., 222 Kan. 527, 567 P.2d 1292 (1977) (hereinafter Shutts I ), cert. denied, 434
U.S. 1068 (1978), reveals that the Kansas court has examined the
laws of connected jurisdictions and has correctly concluded that
there is no "direct" or "substantive" conflict between the law
applied by Kansas and the laws of those other States. Cf.
ante at 472 U. S. 816 , 472 U. S.
821 -822. Kansas has merely developed general common law
principles to accommodate the novel facts of this litigation --
other state courts either agree with Kansas or have not yet
addressed precisely similar claims. Consequently, I conclude that
the Full Faith and Credit Clause of the Constitution [ Footnote 2/1 ] did not require Kansas to
apply the law of any other State, and the Fourteenth Amendment's
Due Process Clause [ Footnote 2/2 ]
did not prevent Kansas from applying its own law in this case.

															The Court errs today because it applies a loose definition of
the sort of "conflict" of laws required to state a constitutional claim, allowing Phillips a tactical victory
here merely on allegations of "putative" or "likely" conflicts. Ante at 472 U. S. 816 , 472 U. S. 817 .
The Court's choice-of-law analysis also treats the two relevant
constitutional provisions as though they imposed the same
constraints on the forum court. In my view, however, the potential
impact of the Kansas choice on the interests of other sovereign
States and the fairness of its decision to the litigants should be
separately considered. See Allstate Insurance Co. v.
Hague, 449 U. S. 302 , 449 U. S. 320 (1981) (STEVENS, J., concurring in judgment). For both inquiries,
it Page 472 U. S. 825 is essential to have a better understanding of the merits of the
underlying dispute than can be gleaned from the Court's opinion. I
therefore begin with an explanation of the background of this
litigation. I Petitioner (Phillips) is a large independent producer,
purchaser, and seller of natural gas. Beginning in 1954, the prices
at which it sold natural gas to interstate pipeline companies were
regulated by the Federal Power Commission (Commission). [ Footnote 2/3 ] Phillips Petroleum Co. v.
Wisconsin, 347 U. S. 672 (1954). As a party to a large number of producing oil and gas
leases, Phillips is obligated to pay a percentage of the value of
the production, usually one-eighth, to persons owning an interest
in the leased areas, so-called "royalty owners." Some royalty
owners are due monthly royalties by contractual agreements made
directly with Phillips. See Shutts I, supra, at 532, 567
P.2d at 1298. Others are due royalties under contracts made with
other gas producers who then sell their gas to Phillips -- by
separate contract with those producers, Phillips has "assumed the
producer's responsibility to distribute the royalties . . . to the
royalty owners." 235 Kan.195, 218, 679 P.2d 1159 ,
1178 (1984). The relationship between Phillips and the royalty
owners is not regulated by the Commission although it is, of
course, materially affected by the Commission's control over the
pricing relationship between Phillips and its customers.

															In a series of orders entered after 1954, the Commission
established a practice of suspending price increases proposed by
Phillips until approved by the Commission, but allowing Phillips to
collect the higher proposed prices upon the filing by Phillips with
the Commission of a corporate undertaking to refund to its
customers any portion of an increase Page 472 U. S. 826 that is ultimately disapproved by the Commission. Pursuant to
Commission regulation, Phillips agrees that unapproved prices it
collects are subject to refund

															"with interest at seven percent (7%) per annum from the date of
receipt until September 18, 1970, and eight percent (8%) per annum
thereafter until paid out, if the FPC [does] not approve the sales
price." Shutts I, supra, at 533, 567 P.2d at 1299 (emphasis
deleted) (citing 18 CFR § 154.102(c) (1977) and Commission opinion
No. 586, 44 F. P. C. 761, 791 (1970)). Phillips' receipts during
periods when its proposed price increases have not yet received
final approval therefore include two components -- the "firm"
proceeds and the "FPC suspense money." For example, while an
increase in price from 11 cents per Mcf (thousand cubic feet) to 13
cents is under consideration, the collection of the higher price
would include firm proceeds of 11 cents and 2 cents of FPC suspense
money.

															In July 1961, while a price increase applicable to the tristate
Hugoton-Anadarko area (Kansas, Oklahoma, and Texas) was pending,
Phillips sent a notice to the royalty owners for that area advising
them that "until further notice" they would be paid royalties on
the basis of firm proceeds only and that royalties based on
suspense money would be paid only after it was "determined that the
sums collected are no longer subject to refund." The notice also
advised the royalty owners that they could receive ongoing payment
of royalties on the suspense money as well if they furnished
Phillips with an "acceptable indemnity to cover their proportionate
part of any required refunds, plus the required interest. " Shutts I, 222 Kan. at 534, 567 P.2d at 1299 (emphasis
added). [ Footnote 2/4 ] The
indemnity which Phillips required was a corporate Page 472 U. S. 827 security bond covering a principal amount based on estimated
production for a 2-year period, plus the 7% interest rate Phillips
would be required to pay to its customers if the price increase
were not approved. Only 17 royalty owners provided Phillips with
such an indemnity; approximately 6,400 royalty owners who did not
do so did not receive royalties on the suspense proceeds until 11
years later, after the price increase was finally approved. The
situation was succinctly summarized by the Kansas Supreme Court in Shutts I: "From June 1, 1961, to October 1, 1970, Phillips deposited the
increased rate monies collected in its general account and
commingled it with its other funds, without ever giving notice
of this fact to royalty owners during the time it was holding
money. It is important to note that during this period of time Phillips had no entitlement to the gas royalty owners' share of
the 'suspense royalties,' whether or not the rates were approved by
the FPC. Phillips never owned this money. While Phillips
collected eight-eighths (8/8) of the increased rates, under no
condition was the one-eighth (1/8) of the increase attributable to
the royalty owners ever to go to Phillips. That royalty share,
according to eventual FPC ruling, was either to go to Phillips'
royalty owners, or back to Phillips' gas purchasers with interest,
or part to one and part to the other." Id. at 535, 567 P.2d at 1300 (emphasis in
original). Page 472 U. S. 828 In 1970, the Commission entered an order approving Phillips'
Hugoton-Anadarko price increases to the extent of approximately
$153,000,000 and disapproving them to the extent of approximately
$29,000,000. Thus, over 18% of the suspense money had to be
refunded to Phillips' customers, with interest at the rates to
which Phillips had agreed under Commission regulation. Having no
jurisdiction over the relationship between Phillips and the royalty
owners, however, the Commission's order was silent on the subject
of royalties on the $153 million of suspense money that did not
have to be refunded. After the Commission's order was finally
affirmed by the Ninth Circuit in 1972, In re Hugoton-Anadarko
Area Rate Case, 466 F.2d 974, Phillips mailed checks to the
royalty owners for their share of the suspense moneys based on the
approved higher prices that had been collected since 1961.
However,

															"Phillips neither paid nor offered to pay any interest for the
use of the money, nor did Phillips say anything about interest or
how long the money had been held or used by Phillips." Shutts I, supra, at 537, 567 P.2d at 1301.

															The foregoing facts gave rise to Shutts I. This case (Shutts II) involves suspense royalties due on similar
price increases approved in 1976, 1977, and 1978 to a larger number
of royalty owners (28,100) with interests in leased areas located
in 11 States, including Kansas. Otherwise, however, "[w]ith a few
exceptions this case is similar in legal issues and factual
situation to that presented in Shutt [I]. " 235 Kan. at
198, 679 P.2d at 1165. Both cases involve what the Kansas Supreme
Court has characterized as a "common fund" consisting of the
suspense royalties undeniably owed by Phillips Page 472 U. S. 829 but not paid for periods of several years while Commission
approval of rate increases were pending. [ Footnote 2/5 ] It is undisputed that Phillips enjoyed the
unfettered use of that money. See 222 Kan. at 560, 567
P.2d at 1316 (testimony of Phillips' Treasurer). It is also
undisputed that, when the Commission proceedings ended, none of the
money could be retained by Phillips. To the extent that a price
increase was disapproved, a refund to the purchasing pipelines,
plus interest at the rate set by the Commission, would be required;
to the extent that the increases were approved, the money was
contractually owed to the royalty owners. As the Kansas court
noted: "What is significant is these gas royalty suspense monies
never did nor could belong to Phillips." Ibid. (emphasis
deleted). [ Footnote 2/6 ] Page 472 U. S. 830 In Shutts I, the Kansas Supreme Court held that general
equitable principles required the award of interest on royalties
owed to royalty owners but used by Phillips for a number of years.
In support of that conclusion it relied on general statements in
two Kansas cases [ Footnote 2/7 ] and
a long line of federal cases applying Texas law and
concluding that equity requires "the award of interest on suspense
royalties under similar circumstances." Id. at 561, 567
P.2d at 1317. [ Footnote 2/8 ] The
court noted that Oklahoma had no decisions allowing interest on
suspense royalties, but concluded that

															"several Oklahoma decisions hold that interest may be awarded on
equitable grounds where necessary to arrive at a fair compensation.
( Smith v. Owens, 397 P.2d 673 [Okla.1963]; and First Nat. Bank & T. Co. v. Exchange Nat.
Bank and T. Co., 517 P.2d
805 [Okla. App.1973]). [ Footnote
2/9 ]"

															Finally, the court construed the royalty agreements at issue as
containing a "contractual Page 472 U. S. 831 obligation" to pay interest on the royalties "for the period of
time the suspense money was held and used by Phillips." Id. at 562, 567 P.2d at 1317. Thus the Kansas court also
found its result consistent with the only Texas state court
decision on point, Stahl Petroleum Co. v. Phillips Petroleum
Co., 550 S.W.2d 360 (Tex.Civ.App.1977), which had "awarded
interest on suspended royalties" based on "the terms of the royalty
agreement . . . rather than unjust enrichment." 222 Kan. at 561,
567 P.2d at 1317. Significantly, when the Texas Supreme Court
subsequently affirmed the Stahl judgment, it relied on the
Kansas Supreme Court's decision in Shutts I to decide that
equity as well as contract law requires interest on suspense
royalties. Phillips Petroleum Co. v. Stahl Petroleum
Co., 569 S.W.2d 480 ,
485-488, and n. 5 (1978).

															After determining that Phillips was liable for interest on the
suspense royalties, the court reversed the trial court's decision
that the rate should be 6%, because that was the statutory interest
rate in Kansas, Oklahoma, and Texas. The Kansas Supreme Court noted
that the statutory rate in all three States expressly applied only
when no other rate had been agreed upon, [ Footnote 2/10 ] and that, in this case, Phillips had
made an express agreement, evidenced by its corporate undertaking,
to pay interest at the rate set by the Commission on suspense
moneys found refundable. 222 Kan. at 564, 567 P.2d at 1319. The
Kansas court therefore declined to apply any State's
interest statute, including its own. "[E]quitable principles
require, and contractual principles dictate, that the royalty
owners receive the same treatment" as refunded purchasers, Page 472 U. S. 832 that is, payment at the same FPC rate of interest. [ Footnote 2/11 ] Id. at 563, 567
P.2d at 1318.

															Finally, the Kansas Supreme Court rejected Phillips' contention
that royalty owners had "waived" their claims to interest by
accepting payment of the royalties later or by failing to post an
indemnity "acceptable" to Phillips in order to receive
contemporaneous payment of suspense royalties. The court noted that
the "conditions imposed by Phillips were far more stringent than
the corporate undertaking Phillips filed with the FPC," id. at 567, 567 P.2d at 1320, and concluded that it
was

															"apparent [that] Phillips' previous imposition of burdensome
conditions upon royalty owners . . . was designed to accomplish
precisely what the facts disclose. Virtually none of the royalty
owners complied with the conditions, thereby leaving the suspense
royalties in the hands of Phillips as stakeholder to use at its
pleasure. . . ." Id. at 566, 567 P.2d at 1320. The court found the rule
that "payment of the principal sum is a legal bar to a subsequent
action for interest" inapplicable on these facts. Id. at
567, 567 P.2d at 1321. Instead, because

															"payment of [the royalties due] to the plaintiff class members,
instead of extinguishing the debt, constituted only a partial
payment on an interest-bearing debt[,] [t]his situation invokes
application of the so-called 'United States Rule,' which provides
that in applying partial payments to an interest-bearing debt which
is due, in Page 472 U. S. 833 the absence of an agreement or statute to the contrary, the
payment should be first applied to the interest due." Ibid. [ Footnote
2/12 ]

															In Shutts II, the case now under review, the Kansas
Supreme Court adopted its earlier analysis in Shutts I without repeating it.

															"Although a larger class is involved than in Shutts I, the legal issues presented are substantially the same. While these
issues are complex they were thoroughly reviewed in Shutts
I. "

															235 Kan. at 211, 679 P.2d at 1174. [ Footnote 2/13 ] Noting that "Phillips has not
satisfactorily established why this court should not apply the rule
enunciated in Shutts I, " the Kansas court went on to state
that once jurisdiction over Page 472 U. S. 834 a "nationwide class action" is properly asserted, "the law of
the forum should be applied unless compelling reasons exist for
applying a different law." Id. at 221, 679 P.2d at
1181. II This Court, of course, can have no concern with the substantive
merits of common law decisions reached by state courts faithfully
applying their own law or the law of another State. When
application of purely state law is at issue,

															"[t]he power delegated to us is for the restraint of
unconstitutional [actions] by the States, and not for the
correction of alleged errors committed by their judiciary." Commercial Bank of Cincinnati
v. Buckingham's Executors , 5 How. 317, 46 U. S. 343 (1847). The Constitution does not expressly mandate particular or
correct choices of law. Rather, a state court's choice of law can
invoke constitutional protections, and hence our jurisdiction, only
if it contravenes some explicit constitutional limitation.
[ Footnote 2/14 ]

															Thus it has long been settled that "a mere misconstruction by
the forum of the laws of a sister State is not a violation of the
Full Faith and Credit Clause." Carroll v. Lanza, 349 U. S. 408 , 349 U. S. 414 ,
n. 1 (1955) (Frankfurter, J., dissenting). [ Footnote 2/15 ] That Clause requires only that States
accord "full faith and credit" to other States' laws -- that is,
acknowledge the validity and finality of such laws and attempt in
good faith to apply them when necessary as they would be applied by
home state Page 4728 U. S. 35 courts. [ Footnote 2/16 ] But as
Justice Holmes explained, when there is

															"nothing to suggest that [one State's court] was not candidly
construing [another State's law] to the best of its ability, . . .
even if it was wrong something more than an error of construction
is necessary"

															to invoke the Constitution. Pennsylvania Fire Ins. Co. v.
Gold Issue Mining & Milling Co., 243 U. S.
93 , 243 U. S. 96 (1917).

															Merely to state these general principles is to refute any
argument that Kansas' decision below violated the Full Faith and
Credit Clause. As the opinion in Shutts I indicates, the
Kansas court made a careful survey of the relevant laws of Oklahoma
and Texas, the only other States whose law is proffered as relevant
to this litigation. But, as the Court acknowledges, ante at 472 U. S.
816 -818, no other State's laws or judicial decisions
were precisely on point, and, in the Kansas court's judgment,
roughly analogous Texas and Oklahoma cases supported the results
the Kansas court reached. The Kansas court expressly declared that,
in a multistate action, a "court should also give careful
consideration, as we have attempted to do, to any possible conflict
of law problems." 222 Kan. at 557, 567 P.2d at 1314. [ Footnote 2/17 ] While a common law judge
might disagree with the substantive legal determinations made by
the Kansas court (although nothing in its opinion seems erroneous
to me), that court's approach to the possible choices of law
evinces precisely the "full faith and credit" that the Constitution
requires. Page 472 U. S. 836 It is imaginable that even a good faith review of another
State's law might still "unjustifiably infring[e] upon the
legitimate interests of another State" so as to violate the Full
Faith and Credit Clause. Allstate, 449 U.S. at 449 U. S. 323 (STEVENS, J., concurring in judgment). If, for example, a Texas oil
company or a Texas royalty owner with an interest in a Texas lease
were treated directly contrary to a stated policy of the State of
Texas by a Kansas court through some honest blunder, the
Constitution might bar such "parochial entrenchment" on Texas'
interests. Thomas v. Washington Gas Light Co., 448 U. S. 261 , 448 U. S. 272 (1980) (plurality opinion). [ Footnote
2/18 ] But this case is so distant from such a situation that I
need not pursue this theoretical possibility. Even Phillips does
not contend that any stated policies of other States have been
plainly contravened, and the Court's discussion is founded merely
on an absence of reported decisions and the Court's speculation of
what Oklahoma or Texas courts might "most likely" do in a case like
this. Ante at 472 U. S. 817 .
There is simply no demonstration here that the Kansas Supreme
Court's decision has impaired the legitimate interests of any other
States or infringed on their sovereignty in the slightest. Page 472 U. S. 837 III It is nevertheless possible for a State's choice of law to
violate the Constitution because it is so "totally arbitrary or . .
. fundamentally unfair" to a litigant that it violates the Due
Process Clause. Allstate, 449 U.S. at 449 U. S. 326 (STEVENS, J., concurring in judgment). If the forum court has no
connection to the lawsuit other than its jurisdiction over the
parties, a decision to apply the forum State's law might so
"frustrat[e] the justifiable expectations of the parties" as to be
unconstitutional. Id. at 327. [ Footnote 2/19 ]

															Again, however, a constitutional claim of "unfair surprise"
cannot be based merely upon an unexpected choice of a particular
State's law -- it must rest on a persuasive showing of an
unexpected result arrived at by application of that law. Thus,
absent any conflict of laws, in terms of the results they produce,
the Due Process Clause simply has not been violated. This is
because the underlying theory of a choice-of-law due process claim
must be that parties plan their conduct and contractual relations
based upon their legitimate expectations Page 472 U. S. 838 concerning the subsequent legal consequences of their actions.
For example, they might base a decision on the belief that the law
of a particular State will govern. But a change in that State's law
in the interim between the execution and the performance of the
contract would not violate the Due Process Clause. Nor would the
Constitution be violated simply because a state court made an
unanticipated ruling on a previously unanswered question of law --
perhaps a choice-of-law question.

															In this case it is perfectly clear that there has been no due
process violation because this is a classic "false conflicts" case.
[ Footnote 2/20 ] Phillips has not
demonstrated that any significant conflicts exist merely because
Oklahoma and Texas state case law is silent concerning the
equitable theories developed by the Kansas courts in this
litigation, or even because the language of some Oklahoma and Texas
statutes suggests that those States would "most likely" reach
different results. Ante at 472 U. S.
816 -818. The Court's heavy reliance on the
characterization of the law provided by Phillips is not an adequate
substitute for a neutral review. Ante at 472 U. S. 816 , 472 U. S. 817 ("Petitioner claims," "petitioner shows," "petitioner points to,"
"Petitioner also points out . . ."). As is unmistakable from a
review of Shutts I, the Kansas Supreme Court has examined
the same laws cited by the Court today as indicative of "direct"
conflicts, and construed them as supportive of the Page 472 U. S. 839 Kansas result. [ Footnote 2/21 ]
Our precedents, to say nothing of the Constitution and our
statutory jurisdiction to review state court judgments, do not
permit the Court to second-guess these substantive judgments.
Moreover, an independent examination demonstrates solid support for
the Kansas court's conclusions. [ Footnote 2/22 ] Page 472 U. S. 840 The crux of my disagreement with the Court is over the standard
applied to evaluate the sufficiency of allegations of choice-of-law
conflicts necessary to support a constitutional Page 472 U. S. 841 claim. Rather than potential, "putative," or even "likely"
conflicts, I would require demonstration of an unambiguous conflict with the established law of another State as an
essential element of a constitutional choice-of-law claim.
Arguments that a state court has merely applied general common law
principles in a novel manner, or reconciled arguably Page 472 U. S. 842 conflicting laws erroneously in the face of unprecedented
factual circumstances should not suffice to make out a
constitutional issue.

															In this case, the Kansas Supreme Court's application of general
principles of equity, its interpretation of the agreements, its
reliance on the Commission's regulations, [ Footnote 2/23 ] and its construction of general
statutory terms contravened no established legal principles of
other States and consequently cannot be characterized as either
arbitrary or fundamentally unfair to Phillips. I therefore can find
no due process violation in the Kansas court's decision. [ Footnote 2/24 ] Page 472 U. S. 843 IV In final analysis, the Court today may merely be expressing its
disagreement with the Kansas Supreme Court's statement that in a
"nationwide class action . . . the law of the forum should be
applied unless compelling reasons exist for applying a different
law." 235 Kan. at 221, 679 P.2d at 1181. Considering this statement
against the background of the Kansas Supreme Court's careful
analysis in Shutts I, however, I am confident that court
would agree that every state court has an obligation under the Full
Faith and Credit Clause to "respect the legitimate interests of
other States and avoid infringement upon their sovereignty." Allstate, 449 U.S. at 449 U. S. 322 (STEVENS, J., concurring in judgment); see Nevada v. Hall, 440 U. S. 410 , 440 U. S. 421 , 440 U. S. 424 ,
n. 24 (1979).

															It is also agreed that

															"the fact that a choice-of-law decision may be unsound . . .
does not necessarily implicate the federal concerns embodied in the
Full Faith and Credit Clause." Allstate, 449 U.S. at 449 U. S. 323 (STEVENS, J., concurring in judgment); see ante at 472 U. S. 823 ("in many situations a state court may be free to apply one of
several choices of law"); Allstate, 449 U.S. at 449 U. S. 307 (plurality opinion). When a suit involves claims connected to
States other than the forum State, the Constitution requires only
that the relevant laws of other States that are brought to the
attention of the forum court be examined fairly prior to making a
choice of law. [ Footnote 2/25 ]
Because this Court "reviews judgments, not opinions," Chevron U.S.A. Inc. v.
Natural Resources Defense Council, Inc. , 467 U. S. 837 , 467 U. S. 842 (1984), criticism of a portion of the Kansas Page 472 U. S. 844 court's opinion taken out of context provides an insufficient
basis for reversing its judgment. Unless the actual choice of Kansas law violated substantial constitutional rights of the
parties, see 28 U.S.C. § 2111, our power to review
judgments of state law -- including the state law of choice of law
-- does not extend to reversal based on disagreement with the law's
application. A review of the record and the underlying litigation
here convincingly demonstrates that, despite Phillips'
protestations regarding Kansas' development of common law
principles, no disregard for the laws of other States nor unfair
application of Kansas law to the litigants has occurred. [ Footnote 2/26 ] Phillips has no
constitutional right to avoid judgment in Kansas because it might
have convinced a court in another State to develop its law
differently.

															I do not believe the Court should engage in detailed evaluations
of various States' laws. To the contrary, I believe our limited
jurisdiction to review state court judgments should foreclose such
review. [ Footnote 2/27 ]
Accordingly, I trust that today's Page 472 U. S. 845 decision is no more than a momentary aberration, and that the
Court's opinion will not be read as a decision to constitutionalize
novel state court developments in the common law whenever a
litigant can claim that another State connected to the litigation
"most likely" would reach a different result. The Court long ago
decided that state court choices of law are unreviewable here
absent demonstration of an unambiguous conflict in the established
laws of connected States. See n. 472
U.S. 797 fn2/15|>15, supra. "To hold otherwise would render it possible to bring to this
court every case wherein the defeated party claimed that the
statute of another State had been construed to his detriment." Johnson v. New York Life Ins. Co., 187 U.
S. 491 , 187 U. S. 496 (1903). Having ignored this admonition today, the Court may be
forced to renew its turn-of-the-century efforts to convince the bar
that state court judgments based on fair evaluations of other
States' laws are final.

															Accordingly, while I join Parts I and II of the Court's opinion,
I respectfully dissent from Part III and from the judgment.

															[ Footnote 2/1 ]

															"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."

															U.S.Const., Art. IV, § 1. See also 28 U.S.C. §
1738.

															[ Footnote 2/2 ]

															"No State shall . . . deprive any person of life, liberty, or
property, without due process of law. . . ." U.S.Const., Amdt. 14,
§ 1.

															[ Footnote 2/3 ]

															The responsibilities of the Federal Power Commission were
transferred to the Federal Energy Regulatory Commission in 1977. See 91 Stat. 578, 582-584.

															[ Footnote 2/4 ]

															The relevant portion of the 1961 notice provided in full:

															"Effective June 1, 1961, and until further notice, royalties
paid you will be computed by excluding that portion of any price
being collected subject to refund which exceeds 11 [cents] per Mcf
(presently the maximum area price level for increased rates as
recently announced by the Federal Power Commission in its Statement
of General Policy). Payment of royalty based on the balance of the
sums collected will be made at such time as it is determined that
the sums collected are no longer subject to refund."

															"Interest owners desiring to receive payments computed currently
on the full sums being collected may arrange to do so by furnishing
Phillips Petroleum Company acceptable indemnity to cover their
proportionate part of any required refunds, plus the required
interest." Shutts I, 222 Kan. at 534, 567 P.2d at 1299.

															The practice of withholding suspense royalties pending final
Commission price approval was sustained in Ashland Oil &
Refining Co. v. Staats, Inc., 271 F.
Supp. 571 , 579 (Kan.1967), and Boutte v. Chevron Oil
Co., 316 F.
Supp. 524 (ED La.1970), aff'd, 442 F.2d 1337 (CA5
1971) (per curiam).

															[ Footnote 2/5 ]

															"Had Phillips put the 'suspense royalties' into a common trust
fund, separate from its operating funds, to be used solely to pay
either the pipeline companies or the gas royalty owners once the
FPC ultimately decided the rate increase question, this case would
dovetail nicely into the 'common fund' cases." Shutts I, 222 Kan. at 552, 567 P.2d at 1311. Accord, 235 Kan. at 201, 212, 679 P.2d at 1168, 1174. The
Court criticizes Kansas' use of the "common fund" concept as
applied to these funds. Ante at 472 U. S.
819 -820. Kansas is not alone, however, in applying the
common fund concept in a class action to a pool of readily
identifiable moneys placed within the court's power by a liability
determined by the lawsuit itself. See, e.g., Perlman v. First
National Bank of Chicago, 15 Ill.App.3d 784, 799-802, 305
N.E.2d 236, 247-250 (1973) ( cited in Shutts I, 222 Kan. at
553, 567 P.2d at 1311-1312); see also Sprague v. Ticonic
National Bank, 307 U. S. 161 , 307 U. S.
166 -167 (1939) (common fund may be "recovered" in
litigation); Dawson, Lawyers and Involuntary Clients: Attorney Fees
From Funds, 87 Harv.L.Rev. 1597, 1615 (1974) ("Funds can also be
created by the litigation itself"). Moreover, it is of course no
concern of this Court how Kansas chooses to develop its state
common law doctrines. Absent some constitutional foundation plainly
lacking here, the Court's criticism of Kansas' substantive state
law is entirely gratuitous.

															[ Footnote 2/6 ]

															Phillips argued below that some distinction should be made for
purposes of interest liability between royalties owed on gas sold
to pipeline companies who paid the higher "suspense" price and
royalties owed on gas used by Phillips itself rather than sold.
Yet

															"Phillips acknowledges . . . that its obligation to pay
royalties under the various . . . contracts exists without
regard to the actual disposition of the gas. "

															235 Kan. at 215, 679 P.2d at 1177 (emphasis added). Thus,

															"[b]y choosing to withhold payment Phillips was allowed the use
of the suspense monies during the suspense period which rightfully
belonged to the royalty owners, and the royalty owners, in turn,
were deprived of receiving and using those monies during that
time." Id. at 216, 679 P.2d at 1177. Applying the same unjust
enrichment theory developed in Shutts I, the Kansas
Supreme Court accordingly rejected Phillips' proffered distinction.
235 Kan. at 217, 679 P.2d at 1178. Significantly, Phillips does not
claim here that even a "putative" conflict of laws might turn on
this distinction. Phillips pursues the argument only to contend in
a footnote that, because it never actually collected higher prices
on gas that it used itself, no "fund" actually existed. Brief for
Petitioner 21, n. 18. As the Kansas court noted, however, the fund
at issue is the "easily computed" amount of royalties that
were due the royalty owners in any case, not the moneys collected
by Phillips in return for sales. 235 Kan. at 217, 679 P.2d at
1178.

															[ Footnote 2/7 ] Lightcap v. Mobil Oil Corp., 221 Kan. 448, 562 P.2d 1 , cert. denied, 434 U.S. 876 (1977); Shapiro v. Kansas
Public Employees Retirement System, 216 Kan. 353, 357, 532 P.2d 1081 ,
1084 (1975).

															[ Footnote 2/8 ]

															The court cited six cases, four from the Fifth Circuit and two
from the Northern District of Texas, in all of which Phillips was a
named party.

															[ Footnote 2/9 ]

															The Kansas court also pointed out that

															"the United States Supreme Court has noted the imposition of
interest on refunds ordered by the FPC is not an inappropriate
means of preventing unjust enrichment. ( United Gas v. Callery
Properties, 382 U. S. 223 )."

															222 Kan. at 562, 567 P.2d at 1317-1318.

															[ Footnote 2/10 ] See Kan.Stat.Ann. § 16-201 (1974) ("Creditors shall be
allowed to receive interest at the rate of six percent per annum, when no other rate of interest is agreed upon ");
Okla.Stat., Tit. 15, § 266 (1971) ("The legal rate of interest
shall be six per cent in the absence of any contract as to
the rate of interest"); Tex.Rev.Civ.Stat.Ann., Art. 5069-1.03
(Vernon 1971) (" When no specified rate of interest is agreed
upon by the parties, interest at the rate of 6% per annum
shall be allowed") (all emphasis added).

															[ Footnote 2/11 ]

															The court also held that interest accruing after the entry of
judgment should be determined by Kansas' post-judgment interest
statute. Kan.Stat.Ann. § 16-204 (1974). Phillips does not and could
not contend that the Constitution bars a Kansas court from applying
the Kansas postjudgment interest statute to judgments entered by
Kansas courts. Such statutes demonstrate an irrefutable state
interest in the force carried by judgments entered by a State's own
courts. See also Klaxon Co. v. Stentor Electric Mfg. Co., 313 U. S. 487 , 313 U. S. 498 (1941) (State interest statutes concern "an incidental item of
damages, interest, with respect to which courts at the forum have
commonly been free to apply their own or some other law as they see
fit").

															[ Footnote 2/12 ]

															The court noted that the " United States Rule' is also
followed in Oklahoma and Texas," and that Phillips had "raised and
lost" its contention of waiver in a similar case in Texas. 222 Kan.
at 568, 567 P.2d at 1321, citing Phillips Petroleum Co. v.
Riverview Gas Compression Co., 409 F.
Supp. 486 (ND Tex.1976). Moreover, because the relevant
Oklahoma statute expressly stated that payment of a principal sum
must be accepted "as such" to support a finding of waiver,
Okla.Stat., Tit. 23, § 8 (1971), the statute was inapplicable here
inasmuch as the royalty payments were not so accepted. 222 Kan. at
568, 567 P.2d at 1321. [ Footnote 2/13 ]

															The only apparently new argument raised by Phillips in Shutts II was that it should not be liable for interest to
a subclass of the affected royalty owners whose direct contractual
agreement for royalties was with other producers who sold their gas
to Phillips under a separate agreement. Although Phillips assumed
the obligation to pay royalties directly to the royalty owners in
these separate agreements, the separate agreements also stated
that, if a suspended price increase were ultimately approved by the
Commission, Phillips would pay the other producers additional money "without interest." Phillips argued that this
"without interest" clause barred interest to the royalty owners as
well as to the other producers. The Kansas Supreme Court rejected
this argument, however, because the royalty owners were not parties
to the separate agreements and because no consideration was paid to
the royalty owners by Phillips in return for this purported waiver
of interest. 235 Kan. at 220, 679 P.2d at 1180.

															"[T]hese provisions, entered into between Phillips and the
producers, cannot unilaterally deprive royalty owners of interest
which they would otherwise be entitled to receive under casinghead
gas contracts in which the provisions do not appear." Ibid. [ Footnote 2/14 ] See 28 U.S.C. § 1257:

															"Final judgments or decrees rendered by the highest court of a
State . . . may be reviewed by the Supreme Court . . . (3) [b]y
writ of certiorari . . . where any title, right, privilege or
immunity is specially set up or claimed under the
Constitution "

															(emphasis added).

															[ Footnote 2/15 ]

															This principle was settled in a number of cases decided on
either side of the turn of this century. See, e.g.,
Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling
Co., 243 U. S. 93 , 243 U. S. 96 (1917); Western Life Indemnity Co. v. Rupp, 235 U.
S. 261 , 235 U. S. 275 (1914); Louisville & Nashville R. Co. v. Melton, 218 U. S. 36 , 218 U. S. 51 , 218 U. S. 52 (1910); Allen v. Alleghany Co., 196 U.
S. 458 , 196 U. S.
464 -465 (1905); Johnson v. New York Life Ins.
Co., 187 U. S. 491 , 187 U. S. 496 (1903); Glenn v. Garth, 147 U. S. 360 , 147 U. S.
367 -370 (1893).

															[ Footnote 2/16 ] Cf. Guaranty Trust Co. v. New York, 326 U. S.
99 , 326 U. S. 109 (1945) (federal courts should apply state law in furtherance of the
goal that "the outcome of the litigation in the federal court
should be substantially the same . . . as it would be if tried in a
State court").

															[ Footnote 2/17 ]

															The Kansas court also stated that Kansas' statutory class action
requirements would "not be fulfilled" if "liability is to be
determined according to varying and inconsistent state laws." 222
Kan. at 557, 567 P.2d at 1314. This belies any notion that the
Kansas court plans to "bootstrap," ante at 472 U. S. 821 ,
its choice-of-law decisions onto its assertion of jurisdiction over
multistate actions; precisely the opposite is suggested.

															[ Footnote 2/18 ]

															As I noted in Allstate, however, the litigant
challenging a court's choice of law clearly "bears the burden of
establishing" a constitutional infringement. 449 U.S. at 449 U. S. 325 ,
n. 13.

															" Prima facie every state is entitled to enforce in its
own courts its own statutes. . . . One who challenges that right .
. . assumes the burden of showing, upon some rational basis, that
of the conflicting interests involved those of the foreign state
are superior to those of the forum." Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532 , 294 U. S. 547 (1935). See Western Life Indemnity Co. v. Rupp, 235 U.S.
at 235 U. S. 275 ("It does not appear that the court's attention was called to any
decision by the courts of Illinois placing a different
construction, or indeed any construction, upon the section in
question. If such decision existed, it was incumbent upon defendant
to prove it"). Thus, if a litigant has failed to call a state
court's attention to relevant law in other jurisdictions, it cannot
raise that law here to create a constitutional issue.

															[ Footnote 2/19 ]

															I noted in Allstate that choice of forum law might also
violate the Due Process Clause in other ways, such as by
irrationally favoring residents over nonresidents or representing a
"dramatic departure from the rule that obtains in most American
jurisdictions." 449 U.S. at 449 U. S. 327 .
The first possibility is not applicable here; all royalty owners
were treated exactly alike in the Kansas court's analysis. As for
the second possibility, a "dramatic departure" must be
distinguished from the application of general equitable principles
to address new situations. Phillips may criticize Kansas' allegedly
"unique notions of contract and oil and gas law," Brief for
Petitioner 33, but such is not a constitutional objection.
State courts, like this Court, constantly must apply and develop
general legal principles to accommodate novel factual circumstances
with the overarching goal of achieving a just result. Today's
decision, for example, newly establishes lawful jurisdiction over a
multistate plaintiffs' class action that Phillips likely could not
have anticipated 15 years ago. Absent some demonstration of a departure from some clear rule obtaining in other
States, an argument merely that "[n]o other state ever has hinted"
at Kansas' result, id. at 32, is unavailing.

															[ Footnote 2/20 ]

															"'[F]alse conflict' really means 'no conflict of laws.' If the
laws of both states relevant to the set of facts are the same, or
would produce the same decision in the lawsuit, there is no real
conflict between them."

															R. Leflar, American Conflicts Law § 93, p. 188 (3d ed.1977). See also E. Scoles & P. Hay, Conflict of Laws § 2.6,
p. 17 (1982) ("A false conflict' exists when the potentially
applicable laws do not differ"). The absence of any direct
conflicts here distinguishes this case from decisions such as Hone Ins. Co. v. Dick, 281 U. S. 397 (1930), and John Hancock Mutual Life Ins. Co. v. Yates, 299 U. S. 178 (1936), where the interstate legal conflicts were clear, conceded,
and dispositive. [ Footnote 2/21 ]

															In Shutts II the Kansas Supreme Court noted that "the
legal issues presented are substantially the same" as in Shutts
I, and that "[w]hile these issues are complex they were
thoroughly reviewed in Shutts I. " 235 Kan. at 211, 679
P.2d at 1174. The court then addressed the award and rate of
interest as "damages to compensate the plaintiffs for the unjust
enrichment derived by Phillips from the use of the plaintiffs'
money," and concluded that,

															"[i]n the instant case, Phillips has not satisfactorily
established why this court should not apply the rule enunciated in Shutts I "

															respecting this claim. Id. at 221, 679 P.2d at 1181.
Two sentences later in the same paragraph, the court made the broad
statement that its forum law should apply absent "compelling
reason." The only fair reading of this statement in context is that
the Kansas court in Shutts II adopted its multistate
choice-of-law survey performed in Shutts I, and properly
placed the burden on Phillips, see n. 472
U.S. 797 fn2/18|>18, supra, to show why the Shutts I conclusions should be reexamined. Even if this
were ambiguous, this Court should give the Kansas Supreme Court the
benefit of the doubt when reviewing its judgment. Thus, I frankly
do not understand the Court's summary rejection of that court's
attempt to incorporate Shutts I. Ante at 472 U. S. 822 ,
n. 8. As for the implication in that same footnote that the
choice-of-law discussion in Shutts I may have been
erroneous on the merits, the statement that the Kansas court "did
not follow contrary Texas precedent" (emphasis added), is
simply wrong. See n. 472
U.S. 797 fn2/22|>22, infra. [ Footnote 2/22 ]

															The Court provides a list of "putative conflicts" ante at 472 U. S.
816 -818. The errors and omissions apparent in the
Court's discussion demonstrate the dangers of relying on
characterizations of state law provided by an interested party.

															1. Although there technically may be "no recorded Oklahoma
decision dealing with interest liability for suspended
royalties, " ante at 472 U. S.
816 -817 (emphasis added), Oklahoma law expressly
provides that the damages

															"caused by the breach of an obligation to pay money only is
deemed to be the amount due by the terms of the obligation, with interest thereon. "

															Okla.Stat., Tit. 23, § 22 (1981) (emphasis added); see
also § 6 ("Any person who is entitled to recover damages
certain, or capable of being made certain by calculation, . . . is
entitled also to recover interest thereon"). The Oklahoma Supreme
Court has specifically held that oil field royalty owners may sue
as a class to recover royalties due them and may recover interest
on the amount of recovery. West Edmond Hunton Line Unit v.
Young, 325 P.2d 1047 (1958).

															2. No authority in the Court's string citation regarding
Oklahoma's 6% statutory interest rate supports the statement that
Oklahoma would "most likely" impose that rate in a suit such as
this. Ante at 472 U. S. 817 .
The constitutional and statutory provisions merely provide that "in
the absence of any contract" the rate is indeed 6%. Okla.Stat.Ann.,
Tit. 15, § 266 (1981). The cited judicial decisions merely hold
that interest is recoverable on certain obligations, including
royalties due to oil field royalty owners, without discussing
applicable limitations on the rate.

															After examining these Oklahoma authorities, the Kansas Supreme
Court found the Oklahoma statutory rate, as well as that of Texas and Kansas, inapplicable by its own terms, because here
Phillips had contractually agreed to the higher federal rate. 235
Kan. at 220-221, 679 P.2d at 1180; 222 Kan. at 563-565, 567 P.2d at
1318-1319. No reported Oklahoma decision contradicts this judgment,
and the express terms of the Oklahoma statute permit it. See
also McAnally v. Ideal Federal Credit Union, 428 P.2d 322 ,
326 (Okla.1967) (where federal law provides for interest in excess
of 12% per year, that rate "must govern" over Oklahoma statutory
rate).

															3. The Kansas court similarly reviewed Texas' 6% interest
statute and found that Phillips' contractual agreement to the FPC
rate rendered the statute inapplicable. 235 Kan. at 220, 679 P.2d
at 1180; 222 Kan. at 563-565, 567 P.2d at 1318-1319. It is true
that Texas has not awarded suspense royalty interest at a rate
higher than 6% -- it is equally plain from the cited cases that no
higher rate has been sought. Texas courts have, however,
specifically permitted recovery at higher rates when a contract,
even an implied or oral contract, evidences agreement to such
rates. Preston Farm & Ranch Supply, Inc. v. Bio-Zyme
Enterprises, 625 S.W.2d 295 (Tex.1981); Moody v. Main Bank of Houston, 667 S.W.2d 613
(Tex.App.1984).

															4. While noting Phillips' reliance on an Oklahoma statute
stating that "accepting payment of the whole principal, as such,
waives all claim to interest," Okla.Stat.Ann., Tit. 23, § 8 (1981),
the Court itself demonstrates that this statute's application here
is open to question, by citing as "cf." Webster Drilling Co. v.
Sterling Oil of Okla., Inc., 376 P.2d
236 , 238 (Okla.1962). In that case, the Oklahoma Supreme Court
held that, when a right to interest is "based upon a contract, the
interest has become a substantive part of the debt itself,'"
and Title 23, § 8, "is not applicable." Id. at 238
(citation omitted). The claim to interest upheld in Webster
Drilling was based on an implied contract, exactly as the
Kansas Supreme Court found in Shutts I. 222 Kan. at 562,
565, 567 P.2d at 1317, 1319. The Kansas Supreme Court explicitly
considered Title 23, § 8, and relied on Webster Drilling to find it inapplicable. 222 Kan. at 568, 567 P.2d at 1321. It is
therefore impossible to suggest, as the Court does, that the Kansas
court "ignor[ed]" the Oklahoma statute. Ante at 472 U. S.
817 . 5. Finally, the Court plainly misconstrues Texas law by
suggesting that a mere "offer" to pay suspended royalties in return
for an indemnity agreement would, by itself, excuse interest. In
the federal decision cited by the Court, which mentions no Texas
cases at the relevant pages, Phillips Petroleum Co. v.
Riverside Gas Co., 409 F. Supp. at 495-496, indemnity
agreements were actually entered into. Id. at
490. The Fifth Circuit case relied on for authority, which did cite Texas cases, states that an
" unconditional offer to give up possession of a disputed
fund" is necessary before a bar to interest is created. Phillips Petroleum Co. v. Adams, 513 F.2d 355, 370 (1975)
(emphasis added). The Texas Supreme Court has subsequently agreed
that Adams correctly stated Texas law. Phillips
Petroleum Co. v. Stahl Petroleum Co., 569 S.W.2d 480 ,
487 (1978). See also Fuller v. Phillips Petroleum
Co., 408 F.
Supp. 643 , 646 (ND Tex.1976) (entering indemnity agreement
terminates interest liability because Phillips "lost the reasonably
free use of the money"). No indemnity agreements were entered into
by the plaintiffs here, however, and as the Kansas Supreme Court
found, Phillips' indemnity offer was not "unconditional" -- to the
contrary, it was "far more stringent than the corporate undertaking
Phillips filed with the FPC." 222 Kan. at 567, 567 P.2d at 1320. It
is also uncontested that Phillips continued to use freely the
unpaid suspense royalties long after its "burdensome" conditions
were not accepted by the royalty owners. Id. at 566, 567
P.2d at 1320. The Court errs drastically by relying on what one
Federal District Court "appears" to have held to sustain a constitutional choice-of-law claim.

															[ Footnote 2/23 ]

															The fact that the Kansas court rejected its own State's statute
in favor of the uniform federal interest rate, to which it found
Phillips had contractually agreed, demonstrates the absence of
parochialism from its decision. There is absolutely no indication
that Texas or Oklahoma courts would have decided differently had
the same claim been presented there.

															[ Footnote 2/24 ]

															Neither Phillips nor the Court contends that Kansas cannot
constitutionally apply its own laws to the claims of Kansas
residents, even though the leased land may lie in other States and
no other apparent connection to Kansas may exist. Phillips has done
business in Kansas throughout the years relevant to this litigation
and it seems unarguable that application of Kansas law, or indeed
the law of any of the 50 States where royalty owners reside, to the
claims of at least some of the plaintiff class members was thus
"perceived as possible" by Phillips "at the time of contracting." Allstate, 449 U.S. at 449 U. S. 331 ,
n. 24 (STEVENS, J., concurring in judgment); see id. at 449 U. S.
316 -318, and n. 22. It was also possible, of course,
that any number of royalty owners might have moved to Kansas in the
years Phillips held their suspense royalties, and that Kansas has a
substantial interest in seeing its residents treated fairly when
they invoke the jurisdiction of its courts. See Weinberg,
Conflicts Cases and the Problem of Relevant Time, 10 Hofstra L.Rev.
1023, 1040-1043 (1982). Because Phillips must have anticipated
application of Kansas law to some claims, the eventual geographic
distribution of royalty owners' residences goes only to
"likelihood" and not to fairness of the application of Kansas law. Allstate, 449 U.S. at 449 U. S. 331 ,
n. 24 (STEVENS, J., concurring in judgment). Additionally, it is
easy enough for national firms like Phillips to make clear their
expectations by placing express choice-of-law clauses in their
contracts. See Allstate, 449 U.S. at 449 U. S. 318 ,
n. 24; id. at 449 U. S. 324 , 449 U. S. 328 (STEVENS, J., concurring in judgment); Clay v. Sun Ins. Office,
Ltd., 377 U. S. 179 , 377 U. S. 182 (1964). No such clauses are present here, however.

															[ Footnote 2/25 ] See Allstate, 449 U.S. at 449 U. S. 326 (STEVENS, J., concurring in judgment) (footnote omitted):

															"I question whether a judge's decision to apply the law of his
own State could ever be described as wholly irrational. For judges
are presumably familiar with their own state law and may find it
difficult and time consuming to discover and apply correctly the
law of another State. The forum State's interest in fair and
efficient administration of justice is therefore sufficient, in my
judgment, to attach a presumption of validity to a forum State's
decision to apply its own law to a dispute over which it has
jurisdiction."

															[ Footnote 2/26 ] Accord, 3 H. Newberg, Newberg on Class Actions § 13.28,
p. 63 (2d ed.1985) ("the Kansas court in Shutts II may
have committed only harmless error in applying its own law because
there appears to be no significant conflict of laws among the
states involved").

															[ Footnote 2/27 ]

															The Court's decision in Allstate has been criticized on
the ground that there may well have been no true conflict of laws
present, and, therefore, no need for extended constitutional
discussion. See Weintraub, Who's Afraid of Constitutional
Limitations on Choice of Law?, 10 Hofstra L.Rev. 17, 18-24 (1981).
As I have demonstrated, the Court is once again open to this
criticism.

															Indeed, unless our review is restricted to cases in which
conflicts are unambiguous, the Court will constantly run the risk
of misconstruing the common law of any number of States. For
example, the Kansas Supreme Court has already decided that Oklahoma
would not apply its statutory interest rates where there is
evidence of a contractual agreement to a different rate, and that
such an agreement is present here. 235 Kan. at 220, 679 P.2d at
1180; 222 Kan. at 562-565, 567 P.2d at 1318-1319. Yet today the
Court speculates that Oklahoma "would most likely apply" its
statutory rates in this lawsuit. Ante at 472 U. S. 817 .
Since this Court has no more authority to resolve such issues of
Oklahoma law than does the Kansas Supreme Court, however, the
latter court remains free to abide by its former judgment.