The Erie Doctrine and Choice of Law: every key term you need (+ practice quiz)
25 flashcard terms for Civil Procedure Topic 4, written to match the course framework. Study them here, then drill them as interactive flashcards, or test yourself with the 15-question quiz — free, no account needed.
The 1938 decision holding that federal courts sitting in diversity must apply state substantive law, including state common law, because there is no general federal common law.
Swift v. Tyson
The 1842 rule Erie overruled, which let federal courts apply their own general common law in commercial cases rather than the decisions of state courts.
Rules of Decision Act
The statute directing that the laws of the several states supply the rule of decision in federal civil cases unless federal law provides otherwise; Erie reinterpreted the word laws to include judicial decisions.
Twin aims of Erie
Discouraging forum shopping between state and federal courts and avoiding the inequitable administration of the laws that results when outcome depends on which courthouse is chosen.
Black and White Taxicab case
The pre-Erie abuse in which a company reincorporated in another state solely to create diversity and obtain more favorable federal general common law.
Substance versus procedure
The central Erie line: state law governs substantive rights while federal courts apply their own procedure, though the boundary is contested and depends on the source of the federal rule.
Guaranty Trust Co. v. York
The outcome determinative test: a state statute of limitations must be applied in diversity because ignoring it would significantly affect the result of the litigation.
Byrd v. Blue Ridge Electric Cooperative
Introduced balancing: state interests are weighed against countervailing federal interests such as the federal jury's constitutional role in dividing fact-finding functions.
Hanna v. Plumer
The two-track framework: when a Federal Rule is on point it governs if valid, and only unguided Erie choices are tested by the modified outcome determinative and forum shopping analysis.
Rules Enabling Act
Congress authorized the Supreme Court to prescribe rules of practice and procedure that must not abridge, enlarge, or modify any substantive right, which is the validity test for the Federal Rules.
Modified outcome determinative test
Under Hanna, outcome differences matter only when viewed at the time the plaintiff chose a forum and only if they would drive forum shopping or produce inequitable administration.
Direct collision
A Federal Rule displaces state law only where the two genuinely conflict; courts often read the Rule narrowly to avoid the clash and thereby leave state law room to operate.
Walker v. Armco Steel Corp.
Rule 3 governs the internal timing of federal litigation but does not displace a state rule making service the event that tolls the statute of limitations.
Gasperini v. Center for Humanities
New York's excessiveness review standard for damages applied in federal court through the trial judge, accommodating state substantive policy with the Seventh Amendment.
Shady Grove Orthopedic Associates v. Allstate
A fragmented decision applying Rule 23 over a New York statute barring class treatment of penalty claims, splitting over how to test a Rule under the Rules Enabling Act.
Semtek International v. Lockheed Martin
The claim-preclusive effect of a federal diversity judgment is governed by federal common law, which ordinarily adopts the preclusion law of the state where the court sits.
Vertical choice of law
The Erie question of whether federal or state law supplies the rule in a federal court, distinct from the horizontal question of which state's law applies.
Horizontal choice of law
The selection among competing state laws; a federal court in diversity uses the conflicts rules of the forum state rather than devising its own choice principles.
Klaxon Co. v. Stentor Electric
The 1941 case requiring federal courts in diversity to apply the forum state's choice-of-law rules, extending Erie so that transfer or filing location does not change the applicable law.
Ascertaining state law
Absent a decision from the state's highest court, a federal court makes an Erie guess by predicting how that court would rule, using intermediate decisions and general trends.
Certification to state courts
Many states allow a federal court facing an unsettled state law question to certify it to the state supreme court, avoiding an unreliable prediction on an important issue.
Federal common law
The narrow body of judge-made federal law that survives Erie in enclaves such as interstate disputes, admiralty, and matters affecting uniquely federal governmental interests.
Clearfield Trust Co. v. United States
Rights and duties on commercial paper issued by the United States are governed by federal common law because the government's operations require nationwide uniformity.
Burden of proof allocation
Which party carries the burden on an element is generally treated as substantive under Erie, so the federal court follows the state rule rather than any federal practice.
Door closing statutes
State laws barring certain suits in state court raise a difficult Erie question because enforcing them in federal court affects access while ignoring them invites forum shopping.