The Erie doctrine tells a federal court sitting in diversity which law to apply. The answer is federal procedural law and state substantive law. The point is that the outcome of a case should not depend on whether it is filed in state or federal court in the same state. The hard part is not the principle but the line between substance and procedure, and the Supreme Court has drawn it in several different ways over the years.
Rule
- Start with the conflict. Ask whether the state and federal approaches actually differ. If they do not, there is nothing to decide.
- Is a Federal Rule on point? If a valid Federal Rule of Civil Procedure directly covers the question, it applies, provided it is procedural and does not abridge a substantive right.
- If no Rule applies. Ask whether the choice would be outcome determinative, viewed in light of the twin aims of discouraging forum shopping and avoiding inequitable administration of the laws.
- Balance the interests. Weigh the state's interest in its rule against any countervailing federal interest.
- Classic substantive matters. Statutes of limitations, elements of a claim, standards of care and burdens of proof are generally state law in diversity.
Leading cases
- Erie Railroad Co. v. Tompkins: there is no federal general common law, so a federal court in diversity applies the substantive law of the state, including its judicial decisions.
- Guaranty Trust Co. v. York: a state statute of limitations applies where ignoring it would significantly affect the outcome of the litigation.
- Hanna v. Plumer: where a valid Federal Rule covers the point it governs, and the outcome determinative test is read in light of the twin aims of Erie rather than mechanically.
Where students go wrong
The first mistake is jumping straight to substance versus procedure. Work the steps in order, because the answer changes completely once a Federal Rule is directly on point.
The second is treating outcome determinative as meaning any difference at all. Almost every rule affects outcomes somehow. The question is whether the difference would drive a rational litigant to choose the federal forum.
The third is forgetting that Erie applies to supplemental state claims in a federal question case too, not only to pure diversity suits.
FAQ
Does Erie apply in federal question cases?
The core holding concerns state created rights, so it governs any state law claim in federal court, including one heard under supplemental jurisdiction. It does not govern the federal claims themselves.
Which state's law does the federal court apply?
The whole law of the forum state, including its choice of law rules, so a federal court reaches the same substantive law a state court across the street would.
Are statutes of limitations substantive?
For Erie purposes, generally yes. A federal court in diversity applies the state limitations period and the state tolling rules that go with it.
Related terms
Working through this in your own casebook takes longer than reading it here. Syllume starts from your syllabus and turns each assigned case into a brief you can study from.