The Erie Doctrine

js5389's version from 2015-12-10 22:24

The Erie Doctrine


Question Answer
Erie questions deal withwhat happens when we have a case in federal court in which the underlying cause of action is on a state law claim – the question is do we apply federal or state law?


Question Answer
Erie occurs with- Diversity jurisdiction (most common)
- Federal ingredient jurisdiction (ex on 2010 test)
- Supplemental jurisdiction


Question Answer
Rules of Decisions Act (RDA)§34 of the Judiciary Act of 1789; says that federal courts acting in diversity must follow the substantive laws of the state in which the claim arose
Rules Enabling Act (REA)enacted in 1934; a Congressional grant of power that allowed federal courts to create their own procedural rules (i.e. the Fed. R. Civ. P.)


Question Answer
Swift v. Tyson FactsStory thought a national commitment to a national market required national law that would be uniform across the country as opposed to 50 different and possibly inconsistent laws. He thought that the judiciary would play a huge role in establishing this law --> said the RDA should be read narrowly
Swift v. Tyson HoldingRDA was referring only to state statutes, not state common law. When a case arises in a federal court in diversity, if there is not a state law on point, judges should articulate a federal common law.
Swift v. Tyson Takeaways- Issacharoff: SI <3’s Swift! At the time it was decided, it was no big deal (seemed to make sense at the time), but now the most condemned opinion in American law. Says you can defend it in two ways: 1) we were admitting tons of new states at the time and we didn’t want these lawless places coming in without being regulated by something (i.e. federal common law); 2) desire to protect the commercial market from the passion of the masses
- This was a lovely idea but it failed – ended up creating massive inconsistency --> people just ended up forum shopping like woah and you could end up with two different verdicts on the same issue depending on the parties’ “accident of citizenship”
Black and White Taxicab v. Brown and Yellow Taxicabcab co’s both incorp’d in KY. B&Y got an exclusive dealing k with a RR station to do all the pickups from there, but exclusive dealing k’s were illegal under KY common law (judge made decisional law) so B&W sued. So B&Y de’incorp’d in KY, scurried over the border to TN and reincorp’d there, where there was no jprud on exclusive dealing k’s, and brought a diversity action v. B&Y in federal court. Ct found the exclusive dealing k lawful and enforceable (there was fed common law on point and no TN law)
Erie RR v. Thompson FactsT (PA citizen) was walking on a “well-beaten” path beside a train track in PA; his arm got chopped off when Erie RR train passed by him with a door open. T brought a diversity suit in NY (where RR was incorp’d); under PA common law, T was a trespasser and would recover nothing, but under federal common law, the open door was a “known hazard” so T would recover.
Erie RR v. Thompson HoldingThe RDA was intended to include state statutory and common law, so federal courts hearing a case in jurisdiction are to apply the same substantive law as if the case were being litigated in state court
- “Twin aims: discourage forum shopping, & avoid the inequitable administration of law
Brandeis made 3 arguments to support his holding: 1) the constitution doesn’t give the lower federal cts power to create new common law (SI says this is preposterious b/c this would mean Congress can’t regulate); 2) RDA was interp’d wrongly in Swift; 3) Swift’s effects (B&W taxi) were bad and Swift failed
- Basically, Erie divided laws into substantive (RDA) and procedural (REA), although per Sibbach this divide is blurry at the margins
- Intended as a check on what Brandeis saw as the inappropriately expansive powers of the federal courts in the New Deal era (SI: a rxn to Lochner)
Erie RR v. Thompson Takeaway- Swift was rightly decided and Erie is preposterous! The irony is that Erie didn’t do anything to solve the problems created by Swift – no uniformity b/c now we have state-by-state differing interpretations of laws.
- Moreover, the constitutional question in Erie is better understood as a question about what authority Congress has given to the federal courts in the RDA and REA
York v. Guaranty Trust FactsA class action case that comes up in diversity. Would be barred under the NY state statute of limitations but not by the federal one.1st, ask the “basic Erie question” – is the state statute of limitations substantive (RDA) or procedural (REA)?
York v. Guaranty Trust Holdingdon’t apply federal rule here b/c there would be a different outcome if the state or fed rule were applied
York v. Guaranty Trust Takeaways- the problem is that under this model, everything is outcome-effective (blue back/red back briefs hypo) b/c you’re concerned purely with ex post hindsight judgment calls on what would change an outcome
- Also a problem b/c if you read this opinion literally the RDA has totally hollowed out the REA, b/c the fed cts can only apply fed law when there’s no conflict w/state law --> this creates chaos for supplement juris cases (you’d have to split state and fed claims and the state claim would still be potentially subject to removal! Inefficient and unpredictable!)
Outcome-determinative testwould a different outcome obtain if we applied state or federal law? (wants to get rid of the divide btwn “substantive” and “procedural”)
- If yes (application of a state law would somehow determine the π’s prospect of recovery), it is outcome effective and therefore substantive
- If no, then the federal law is procedural and can be applied
CohenNJ statute requiring class to post a bond applied even though Rule 23 does not require it, since “none of the provisions of Rule 23 conflicted w/the state statute”
Woodsstate statute requiring a foreign corp to designate an agent for in state service had to be followed, b/c “the contrary result would create discriminations against citizens of the State in favor of those authorized to invoke diversity jurisdiction of the federal courts. It was the element that Erie was designed to eliminate”
RaganKS state law tort claim brought in diversity. Under federal law (Rule 3) an action is considered commenced when it is filed; under KS law, an action is not considered commenced until service it perfected. Π did not make service on the ∆ until the 2 yr KS statute of limitations had run (i.e. he was in compliance with Rule 3 but not with KS state law)
Ragan Holdingchoice of law would be o-d here (b/c under KS law, π couldn’t bring claim, but he could pursuant to federal rule), so ct went with state law here
Hanna v. Plumer FactsCase arising in diversity. Fed Rule 4(d)(1) allows for service at residence/to a person who lives there (in this case, ∆ estate executor’s wife); MA rule mandates service in hand. Π complied with federal rule, but under state law the case would be dismissed for failure to properly execute service. Applying state law would obviously be outcome determinative here.
Hanna v. Plumer Holdingif there is a federal rule on point, the federal rule will always trump the state rule and should be applied
Hanna v. Plumer Concurrenceif there is no federal rule on point, we look to whether the choice between state and federal law will effect primary behavior (i.e. ex ante behavior – would it stop people from being executors, stealing the TA notes, losing the photos, etc)
Hanna v. Plumer Takeaway- Warren gives us a good bright line rule, which we like for its certainty, but its rigidity can be problematic as with any bright line rule
- Harlan gives us a good standard and gets it as right as the court is going to get it (b/c it has an ideological underpinning, whereas Warren’s rule is just a line in the sand)!
- - All about private ordering – primary (ex ante) conduct is how you live your life prior to entering into the legal system
- - - The “mischief” of dual sovereignty is the potential for disruption of private ordering
- - O-D test (and RBG’s O-A test in Gasperini, below) is concerned with ex post conduct – your procedural behavior in preparation for litigation once you’ve decided to enter the legal system
Gasperini v. Center for the Humanities FactsDiversity action in federal ct in NY; π sued ∆ for losing his photos and was awarded a shitton of dollhairs. Should ct apply NY State “deviates materially” jury damages review standard that allows for “ample review,” or the federal std as per rule 59 that limits setting aside jury awards only to “extreme” cases?
Gasperini v. Center for the Humanities HoldingCt said trial (district) ct should apply the deviates materially std (more rigorous), and the circuit ct should apply the abuse of discretion review std (less rigorous)
Outcome Affective TestThis is basically the outcome-determinative test from York; also, RBG says that federal rules should be interpreted in such a way as not to conflict with state law, SO THERE WOULD NEVER BE A FEDERAL RULE “ON POINT.”
Gasperini v. Center for the Humanities Takeawaysthis opinion makes no sense --> it unwinds decades of law and disables federal procedural rules to an extent, creating confusion and taking us right back to the days of York.
- It is also worth noting that people sort of ignore Gasperini, and NO ONE BUT RBG cites it in Shady Grove!
Shady Grove v. Allstate FactsScalia’s bright-line revenge, RBG’s last-ditch effort to make Gasperini stick. Π wants to bring class action against ∆ NY State recognizes presumed damages but not 23(b)(3) class actions; rule 23 allows class actions.
Shady Grove v. Allstate Holdingtough tits Allstate. There’s a federal rule on point so class action permitted (bolsters Warren’s Hanna opinion).
Shady Grove v. Allstate Dissentconflict between state rule and 23 is unavoidable, so looks to whether applying 23 is outcome affective. She says it is (you’d obv bring a claim in fed ct if you knew you could cert a class there but not in state court), and would not allow certification