Why was Erie concerned about unfairness created by out-of-state plaintiffs who invoke diversity of citizenship? Note that under Swift, a litigant could seek federal court in the hopes that “federal general common law” would be more favorable than existing state common law. Also, an out-of-state plaintiff has tremendous power in making sure that an in-state defendant is stuck in federal court.
See this chart:
|
In-state party |
Out-of-state party | |
|
Plaintiff |
Could bypass unfavorable state law by filing in federal court. If diversity suit can stay there. |
Could bypass unfavorable state law by filing in federal court. If diversity exists, suit can stay there. |
|
Defendant |
If plaintiff filed in state court, the defendant is stuck there. An in-state defendant cannot remove on the basis of diversity b/c of the forum defendant rule (1441(b)). |
Can bypass unfavorable state law by removing to federal court.
|
Here’s another chart. By “in state,” I mean the state where the suit is filed.
|
In-state Defendant |
Out-of-state Defendant | |
| In-state Plaintiff |
N/A: no diversity. |
In this block, both parties have power if the case is filed in state court. If it is filed in federal court, then defendant lacks power. If plaintiff files in state court, defendant can remove (so long as no other defendants are citizens of the forum state). If plaintiff files in federal court, the suit stays in federal court. |
|
Out-of-state Plaintiff |
In this block, the plaintiff has the most power to select state or federal court. If plaintiff files in state court, defendant cannot remove because of the forum defendant rule. If plaintiff files in federal court, the suit stays in federal court. |
Note that the parties cannot be co-citizens.
In this block, both parties have power if the case is filed in state court. If it is filed in federal court, then defendant lacks power. If plaintiff files in state court, defendant can remove (so long as no other defendants are citizen of the forum state). If plaintiff files in federal court, the suit stays in federal court. |
Posted (draft) March 23, 2015