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Civil Procedure


 
 

The Erie Doctrine

In many circumstances, federal courts are required to hear state law disputes rather than federal law disputes, and are faced with the choice of whether to apply state or federal law. This choice-of-law problem arises most commonly when the federal court’s jurisdiction is based on diversity of citizenship or supplemental jurisdiction.

 

The Rules of Decision Act (RDA)

  1. When to apply federal law: Under the RDA, applicable provisions of the federal Constitution, treaties, and constitutional statutes enacted by Congress always take precedence over state law.

  2. When to apply state law: In the absence of on-point federal constitutional or statutory law, federal courts must apply relevant state law.

  3. Common law: The RDA made no specific mention of which body of law would be applicable if there were neither federal nor state law on point. This led to many federal judges applying, on a case by case, ad hoc basis, their own precedent (“federal common law”).

 
 

Erie Railroad Co. v. Tompkins

  1. Rule:Erie abolished “federal common law” and directs federal courts hearing state causes of action to apply state substantive law when there is no controlling federal statute. In effect, this has resulted in federal courts having to apply state substantive law (including state judge-made or common law) in diversity cases. Federal courts, however, are free to use their own procedural law, even in diversity cases.

  2. Steps to determine whether state or federal procedural law applies:

    1. If the source of the federal procedure is federal case law, the federal court must identify and weigh the purpose behind the state’s procedure, the purpose behind the federal procedure, and the prospect that application of federal law might encourage forum shopping. If applying the federal case law would lead to forum shopping or inequitable administration of the laws, state law should be used. If, however, the state interest is weak and the federal interest strong, the court may apply federal case law instead.

    2. If the source of the federal procedure is the FRCP, or another rule, promulgated under the Rules Enabling Act (REA), federal rules trump state law if: (1) the federal rule at issue is a constitutional rule of procedure within the scope of the REA; and (2) if federal rule and state procedure conflict (Hanna v. Plumer).

      Note: To date, no federal rule has been found to violate the REA.

    3. If the source of the federal procedure is a federal statute, federal procedure applies if: (1) the federal statute is on point; and (2) it is a Constitutional exercise of power by Congress.

  3. Options for the federal court applying state law: If the federal court determines that it should apply state law, but the state law itself is uncertain, the court may:

    1. Abstain from deciding the issue;

    2. Certify the question to the state supreme court (if possible); or

    3. Try, from all the available and relevant sources, to predict how the state supreme court would decide the matter.

  4. Choice of law issues: When a federal court determines it must use state law, the issue then becomes: “which state’s law should be applied?” Federal courts are bound by state conflict of law rules. In other words, in a situation where two states may have different rules and the court is not sure which state’s laws apply, the conflict of law rules of the state in which the federal court sits must be followed to make this determination.