The Erie Doctrine

 

Erie

When a federal court is exercising diversity jurisdiction, it must apply the substantive law of the state in which it sits. Erie Railroad v. Thomkins, clarifying the Rules of Decision Act (28 U.S.C. §1652). A state statute setting forth a cause of action is a clear example of state substantive law. Less obvious examples of substantive law include statutes of limitation, rules for tolling statutes of limitations, and choice of law rules. After Erie, federal courts exercising diversity jurisdiction must apply all judge-made state law, as well as state statutes.

However, while the court applies state substantive law, it must apply federal procedural law. So the short answer to Erie problems is “apply state substantive law and federal procedural law.” These problems get complicated simply because the difference between “substantive” and “procedural” is not always clear.

An effective way to work through a problem is to break it down into two phases. First, determine if the state and federal laws conflict. Second, analyze the federal law to determine whether it should be applied instead of the state law.

A. Determine if there is a conflict.

 

The first question to ask is whether the state and federal laws actually conflict.

1. No conflict

a. Only one system has an applicable rule.

Apply the rule. If there is a state rule on point but no federal rule, use the state rule, and vice versa.

b. The state and federal rules agree.

Either the language of the two rules is exactly the same, or they have the same meaning.

c.  Direct conflict can be avoided by interpreting the federal rule narrowly.

The Supreme Court has only sometimes construed federal law narrowly to avoid conflict. If you have a quick and reasonable argument that the law can be construed narrowly, include it in your essay. However, you should then go on to the conflict analysis.

2. The state and federal rules conflict.

B. Look to the source of the federal law to determine how to resolve the conflict

1. The U.S. Constitution

If the source of the federal law is the Constitution, or a judicial interpretation of the Constitution, the federal law governs.

2. Acts of Congress

a. Acts of Congress generally

If the source of the federal law is an act of Congress (i.e., a federal statute), the federal law governs. This includes judicial interpretations of federal statutes.

Unless

i. the federal law is unconstitutional because it violates a constitutional right, or

ii. the federal law is  not “arguably procedural.”

b. Rules Enabling Act

The Rules Enabling Act gives the Supreme Court “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.” 28 U.S.C. 2072(a).

Rules promulgated by the Supreme Court pursuant to the R.E.A. include the  Federal Rules of Civil Procedure, Federal Rules of Evidence, Federal Rules of Criminal Procedure,  and Federal Rules of Appellate Procedure.

The federal Rule governs, including judicial interpretations of the Rule.

Unless

1. The Rule violates the Rules Enabling Act because it enlarges, restricts, or modifies a “substantive right.” 28 U.S.C. 2072(b).

or

2. The Rule violates the Contstitution.

Hanna v. Plumer.

The Hanna Court emphasized that either one of these scenarios is extremely unlikely. To succeed, a party would essentially have to show that the Supreme Court and Congress were wrong.

3. Judge-made rules

Where the federal rule is judge made, and not an interpretation of the Constitution, an Act of Congress, or a federal Rule, pick the appropriate test:

a. In most cases, use the “twin aims” approach from Hanna v. Plumer.

Use the federal rule if:

i. Applying the federal rule will not result in the inequitable administration of laws.

Will there be a substantial difference in the litigation if the federal rule is applied?

and

ii. Applying the federal rule will not encourage forum shopping.

A substantial difference between the state and federal laws may lead to forum shopping.

b. If the federal rule involves “an essential characteristic of the federal court system,” use the “balancing” approach from Byrd v. Blue Ridge Electric Cooperative, Inc.

Balance the factors to determine whether to use state or federal law:

i. The relationship between the state procedural rule and the substantive state right.

If the state procedural rule is “bound up with” the underlying state right, this factor strongly supports using the state rule.

ii. The interests of the federal judicial system.

If applying the state rule would alter or disrupt an “essential characteristic” of the federal judicial system, this factor strongly supports using the federal rule. “Essential characteristics” particularly  include the distribution of trial functions between the judge, jury, and appellate court.

iii. Likelihood that following the federal rule will affect the outcome.

If the outcome will be significantly different if the federal rule is used, the factor favors using state law.

This can be seen as a different articulation of the “twin aims” approach from Hanna: a substantial difference in outcomes amounts to an “inequitable administration of the laws.” Such an inequitable administration is what causes litigants to forum shop. This makes sense when you consider that the factor comes from Guaranty Trust Co. v. York, the predecessor of Hanna and Byrd.



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1 comment on “The Erie Doctrine”

  1. Christian Reply

    This is a very helpful flow chart because it is clean and easy to read. A lot of other flow charts I have seen try to cram all of the cases involved with Erie into the flowchart itself and this makes it cluttered and almost unreadable. Thanks for this

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