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Erie And Choice Of Law In Diversity Cases

Updated Erie And Choice Of Law In Diversity Cases Notes

Civil Procedure Outlines

Civil Procedure

Approximately 89 pages

Detailed outline and notes from a 1L Civil Procedure class. Includes detailed case summaries, charts and diagrams where appropriate, and the professor's policy discussions interspersed throughout. Would be very helpful for any 1L tackling Civ Pro for the first time....

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The following is a more accessible plain text extract of the PDF sample above, taken from our Civil Procedure Outlines. Due to the challenges of extracting text from PDFs, it will have odd formatting:

Erie And Choice of Law in Diversity Cases

Relevant Rules

  1. Rules of Decision Act: 28 U.S.C. §1652: “The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply.”

  2. Rules Enabling Act: 28 U.S.C. §2072:

    1. “(a) The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts (including proceedings before magistrate judges thereof) and courts of appeals.

    2. (b) Such rules shall not abridge, enlarge or modify any substantive right. All laws in conflict with such rules shall be of no further force or effect after such rules have taken effect.”

Before Erie: Swift v. Tyson (U.S. 1842, Justice Story, CB 924)

  1. Facts: Diversity case about enforcing a bill of exchange.

  2. Question: Does federal court, sitting in diversity, apply state or federal common law, as per section 34 of the Judiciary Act of 1789 (what is now §1652)?

  3. Held: Federal courts apply state statutory law, but not state common law.

    1. “Laws of the several states” should be interpreted strictly to include ONLY state statutory law, not state common law.

      1. Court decisions are evidence of what the law is, but not the law itself.

    2. Created a “federal common law”

  4. Declared unconstitutional by Erie

A summary

Black-letter law summary of all of this

  • State substantive law

  • Federal Procedural Law

Key Legislative Elements

Title Name Content
Rules Enabling Act (1934), § 2072

(a)The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts (including proceedings before magistrate judges thereof) and courts of appeals.

(b)Such rules shall not abridge, enlarge or modify any substantive right. All laws in conflict with such rules shall be of no further force or effect after such rules have taken effect.

(c)Such rules may define when a ruling of a district court is final for the purposes of appeal under section1291of this title.
Rules of Decision Act (Judiciary Act of 1789 §34), § 1652 The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply.

Extreme Deference Least Deference

to state law to state law

[ ----------------------------------------------------------------------------------------------- ]

York ODT | Hanna Twin Aims

[Harlan’s Hanna Concurrence]

Case Year Rule
Erie v. Tompkins 1938 There is no federal common law for state questions. Apply state common law as well as state statutory law.
Sibbach v. Wilson 1941

FRCP 35/37 trumps conflicting state law because it’s procedure.

[Strict divide between procedure and substance.]
Guaranty Trust Co. v. York 1945

“Outcome determinative test” (ODT)

- If State & Fed. outcome disagree, use state

[Purpose of Erie: Same substantive legal outcome regardless of which court you’re in]
Byrd v. Blue Ridge 1958

In addition to York ODT, also consider countervailing federal policies.

[Purpose of Erie: Avoid forum-shopping]
Hanna v. Plumer 1965

  • In the event of state/fed. law conflict, preserve state-created substantive rights.

  • Modify York ODT: apply test in light of twin aims of Erie: (1) avoid forum-shopping; (2) avoid inequitable administration of the laws.

[State procedure doesn’t usually trump FRCP, but construe FRCP narrowly. In this case, outcome is determined by decision; Court chooses federal]
Burlington Northern v. Woods 1987 Apply Hanna Test – if FRCP is on point and constitutional, and conflicts with state law, apply FRCP.
Walker v. Armco Steel

Ragan v. Merchants Transfer

1980

1949

Identical to Ragan. Both about statute of limitation expiring between commencing suit in federal court + serving . FRCP 3.

- Ragan: No state right to sue, therefore no federal right to sue. (York ODT)

[ - Hanna/Burlington test: FRCP trumps state law.]

- Walker: FRCP 3 can be narrowly construed so state and federal law can co-exist.
Gasperini v. Center for Humanities 1996 Extracts state substantive law and attaches it to federal procedural law.
Semtek v. Lockheed Martin 2001 Federal court may have to blend state and federal law, depending on the issue. (While still keeping in mind the twin aims of Erie.)

Erie v. Tompkins (US 1938, Brandeis, CB 925)

  1. Facts: Tompkins hit by a protrusion on a train, walking on a footpath next to tracks. Case is determined by state or federal trespass (tort) law. (PA Law: Trespasser, no rights. Fed: longitudinal easement.)

  2. Question: Should federal courts apply state or general common law?

  3. Held: Federal courts should apply state common law.

    1. THRUST: Swift misinterprets Federal Judiciary Act. Cites a recent law professor’s work.

      1. Parry: Law Prof. Charles Warren discovered an earlier draft of the Rules of Decision Act that included “common law now in use.” BUT does this mean the drafters meant to INCLUDE common law OR purposefully EXCLUDE common law? Not so clear.

    2. Thrust: Swift is unconstitutional and must be overturned. There is no federal general common law.

      1. Parry: Not really clear that Swift is actually unconstitutional. (See Justice Reed’s Concurrence.) But needed a stronger argument to get a majority for the opinion?

    3. Example of Black & White Taxi v. Brown & Yellow Taxi (US 1928, in Erie, CB 927)

      1. Thrust: Cab company reincorporated in a different state to circumvent state common law. This is bad, want to avoid this. Example of forum shopping.

      2. Parry: § 1359 might already prevent this: “A district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has...

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