In Ragan v. Merchants Transfer & Warehouse Co., the U.S. Supreme Court ruled that a federal court must apply state law when determining whether a lawsuit was filed within the statute of limitations period, even if it is sitting in diversity jurisdiction. The case involved an accident victim who had filed his personal injury claim after Kansas's two-year statute of limitations had expired but before the federal three-year limit ended. He argued that since he brought his suit in federal court, which has its own rules for calculating time limits on lawsuits (known as statutes of limitation), he should be allowed to proceed with his case despite missing the state deadline. However, the Supreme Court disagreed and held that because this issue was substantive rather than procedural, it fell under Erie Doctrine principles requiring application of state law in diversity cases.

In the dissenting opinion for Ragan v. Merchants Transfer & Warehouse Co., Justice Frankfurter disagreed with the majority's interpretation of Rule 3 of the Federal Rules of Civil Procedure, which states that a civil action is commenced by filing a complaint with the court. The majority held that state law should determine when an action commences for purposes of tolling statutes of limitations in diversity cases. However, Justice Frankfurter argued that this approach undermined uniformity and simplicity in federal procedure and created unnecessary confusion about whether federal or state rules apply in different situations. He believed it was more consistent to interpret Rule 3 as establishing a general rule applicable to all actions brought under federal jurisdiction, regardless if they are based on diversity or not.