Applying the Erie Doctrine

Document Sample
Applying the Erie Doctrine Powered By Docstoc
					           Applying the Erie Doctrine in Diversity Cases
          A. Erie RR v. Thompkins Rule: If there is no federal or state statutory or
             constitutional provision, federal courts apply state common law.
                 a. Federal constitutional, statutory, or treaty provision:
                    Federal law applies
                 b. No Federal const, stat, or treaty provision exists; but a state
                    const’l or statutory provision exists:
                    State Const. or statute applies
                 c. No federal or state const’l, stat, or treaty provision exists
                    State common law applies

          B. Rationales of Erie
               a. Swift misread the Rules of Decision Act
               b. Swift prompts forum shopping and makes the outcome of the
                   case differ depending on whether the parties are of diverse
               c. It is unconstitutional for the federal courts to make law in an
                   area that Congress cannot or does not regulate

        C. Post-Erie problem: When do federal courts apply federal law and
           when do they apply state law in diversity cases?
              a. Rules Enabling Act, 28 USC 2072 – authorizes the promulgation
                 of federal rules of procedure, but the rules must not “abridge,
                 enlarge, or modify any substantive right.”
              b. Rules of Decision Act, 28 USC 1652, requires that state law be
                 the rule of decision in federal courts, except where federal
                 law otherwise requires.
              c. Supremacy Clause, US Const. Art. IV, provides that federal
Supremacy        law “shall be the supreme Law of the Land; and the judges of
  Clause         every State shall be bound thereby, any thing in the Const. or
                 Laws of any State to the Contrary not withstanding.”

                d. Federal courts in diversity apply state substantive law and
                   federal procedural law.
                       i. Erie and RDA require federal courts to apply state
                          substantive law.
                      ii. REA requires fed. Courts to apply federal rules of

        D. How to distinguish between substance and procedure:
 Guaranty    a. “outcome determinative” test – Guaranty Trust v. York
   Byrd      b. “important federal interest” test – Byrd v. Blue Ridge
                c. existence of valid federal rule test – Hanna v. Plumer
         E. Erie Doctrine Flowchart
            #1 – Identify conflict between fed. and state law on
            procedural/substantive issue. If federal, const, stat, treaty or FRCP
            applies to issue, federal law applies if it is valid.

            #2 – If no federal constitutional, stat., treaty or FRCP applies,
            consider whether choice between federal and state law or
            practice is outcome determinative. If not outcome determinative
             apply federal law. If outcome determinative  go on to ask …

            #3 – Is there an important federal interest in applying the federal
            procedural practice? If not, apply state law. “Important federal
            interest” is up to lawyer’s creativity.
             Federal courts’ interest in protecting the practice of jury trials.
                Byrd v. Blue Ridge.
             Federal government’s interest in having uniform federal
                procedure apply to defense contractors. Boyle v. United

       F. The Law Applied: Assuming state law, which state’s law?
             a. NY plaintiff sues DE, NJ and international defendants in
                federal court in OK (assume min. contacts). Erie says state
Choice          tort law applies. But which state?
  Of         b. Federal courts apply the choice law rules of the state in which
 Law            federal court sits. Klaxon v. Stentor.
             c. Each state applies its own choice of law rules.

         G. More recent approach: State that has the most significant
            relationship to the incident and to the parties.
               a. Factors in torts cases:
                        i. Where injury occurred
                       ii. Where conduct causing injury occurred
                      iii. Domicile of parties
                     iv. Where relationship between parties is centered
               b. Factors in contracts cases:
                        i. Place of contracting
                       ii. Place of performance
                      iii. Place of negotiation
                     iv. Domicile of parties