Erie Doctrine
The Erie doctrine requires federal courts sitting in diversity to apply state substantive law and federal procedural law, raising complex questions about classifying rules as substantive or procedural.
Overview
The Erie doctrine, from Erie Railroad v. Tompkins (1938), overruled Swift v. Tyson and established that federal courts sitting in diversity must apply the substantive law of the state in which they sit. There is no general federal common law — on substantive matters, state law governs.
The critical challenge is distinguishing substance from procedure. Several frameworks guide this analysis. Guaranty Trust v. York introduced the "outcome-determinative" test: if applying the federal rule would lead to a different outcome than applying the state rule, the state rule is substantive and must be applied. This test was refined in Byrd v. Blue Ridge, which added a balancing approach weighing state interests against federal procedural interests.
Hanna v. Plumer established the modern two-track framework. When a Federal Rule of Civil Procedure directly addresses the disputed issue, the Federal Rule applies if it is valid under the Rules Enabling Act (which prohibits rules that abridge, enlarge, or modify substantive rights). When no Federal Rule directly applies, courts use a modified outcome-determinative test (the "twin aims of Erie"): would applying the federal practice lead to forum shopping or the inequitable administration of the law?
Key Erie applications include: statutes of limitations (generally substantive), burden of proof allocation (generally substantive), choice of law rules (substantive, per Klaxon), and service of process methods (generally procedural when a Federal Rule applies, per Hanna).
Key Takeaway
Erie requires federal courts in diversity to apply state substantive law. The Hanna framework determines whether a conflict involves a Federal Rule (apply if valid under REA) or an unguided Erie question (twin aims test).
Exam Tip
Use the two-track approach: (1) Is there a Federal Rule on point? If yes, apply the Federal Rule unless it violates the Rules Enabling Act. (2) If no Federal Rule, apply the twin aims test — would the federal practice encourage forum shopping or inequitable administration of the law?
Landmark Cases (11)
Frequently Asked Questions
What is the Erie doctrine?
The Erie doctrine holds that federal courts sitting in diversity must apply state substantive law and federal procedural law. There is no general federal common law — on matters of substance, the state law of the forum state governs.
What is the Hanna two-track framework?
Track 1: If a Federal Rule of Civil Procedure directly conflicts with state law, apply the Federal Rule if it's valid under the Rules Enabling Act. Track 2: If no Federal Rule applies, use the 'twin aims' test — would applying the federal practice encourage forum shopping or inequitable administration of law?
Why does Erie matter?
Erie prevents federal courts from creating substantive law that differs from state law, ensuring that the outcome of a case doesn't depend on whether it's filed in state or federal court. It prevents forum shopping and ensures the equitable administration of the law.
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