The Rules of Decision Act
- Read the text of 28 U.S.C. 1652. This statute is known as the Rules of Decision Act (“RDA”). Its predecessor is section 34 of the Judiciary Act of 1789. Courts will often still refer to it as Section 34.
- Do not confuse the RDA (Rules of Decision Act) with the REA (Rules Enabling Act). Erie is about the RDA and the Constitution. The REA concerns the permissible scope of rules of the FRCP, and we’ll get to that later when we read Hanna.
- Based solely on the text of RDA, what do you think qualifies as the “laws of the several states?” State constitutions? State statutes? State common law? All three?
Swift
- Read the excerpt in the casebook from Swift v. Tyson. How does Swift interpret the RDA?
- Under Swift, is a federal court sitting in diversity required to apply state constitutions? State statutes? State common law? All three?
- Under Swift, who has more power to create new law: a state trial judge or a federal trial judge?
- Suppose you were going to sue somebody in state court but knew you would lose because of the applicable state law of torts. Does Swift give you an incentive to invoke diversity jurisdiction and sue in federal court?
- Think about the reasons for the Swift doctrine, which allows federal judges sitting in diversity to ignore state common law. Would state common law be harder to find in 1842 than it is today? Did 19th century judges believe that the law could be divined solely through reason, like mathematics or physics?
Black & White Taxicab
- Why did Brown & Yellow Taxicab reincorporate in Tennessee? Wasn’t its business located in Kentucky? Was there any business-related reason for reincorporating in Tennessee? If not, then what was the reason?
- Who would have won under state law?
- Who won in federal court?
- Why?
- How would Justice Holmes have decided the case? Why?
Erie
- Think about the reasons for the Erie doctrine, which requires federal judges sitting in diversity to follow state common law. Was state common law easier to find in 1938 than it was in 1842? Did 20th century judges such as Justice Brandeis believe that the law can be divined solely through reason, like mathematics or physics, or did they instead believe that law is created by judges as an act of politics and power?
- Who would have won the case if the district court had to use Pennsylvania common law? Law enunciated by a federal judge?
- In Erie Second, what are the “mischievous results” of the Swift doctrine?
- In Erie Second, what does the Court mean when it says that the Swift doctrine “rendered impossible equal protection of the law?” Note that the reference to “equal protection” here does not mean the Equal Protection clause of the Fourteenth Amendment.
- In Erie Third, Justice Brandeis concludes that a branch of the federal government has been acting unconstitutionally ever since Swift was decided. Which branch?
- What is “federal general common law?” After Erie, can federal courts still create federal general common law?
- Can federal courts create common law under federal law? What might be the difference between federal common law and federal general common law?
- Why did Justice Brandeis resolve the case on constitutional grounds rather than statutory grounds? Couldn’t he have ended Erie Second by simply reinterpreting the RDA to require federal courts sitting in diversity to apply state common law? If so, then why does he discuss the Constitution in Erie Third? Hint: who has the final say on the meaning of a statute? Who has the final say on the meaning of the Constitution?
- Can you come up with an argument that these provisions of the Constitution might permit Congress to rewrite Sec. 34 of the Judiciary Act (the RDA) to authorize federal courts to create federal general common law? In considering this view, read Justice Reed’s concurrence in Erie and consider these sections of the Constitution:
- Article III (Judiciary)
- Article I, sec. 8, clause 18 (Necessary & Proper clause)
- Article VI, par. 2 (Supremacy Clause)
- Amendment X (Rights reserved to states or people)
- Can you come up with a meaningful distinction between procedure and substance? Is a statute of limitations procedural, merely affecting the timing for asserting a claim? Is it also substantive in that it effects the availability of rights and remedies? Along these lines, see what Justice Reed has to say in his concurrence in Erie.
Erie predictions & Klaxon
- Are federal district judges required to follow the common-law holdings of state trial judges? State intermediate appellate courts? State supreme courts?
- Under Swift, who has more power to create new law: a state trial judge or a federal trial judge?
- Under Erie, who has more power to create new law: a state trial judge or a federal trial judge?
- What should a federal district judge do if she disagrees with a state statute? Follow it or disregard it?
- What if common law from a state supreme court is stale and widely criticized? Must a state trial judge follow old rulings from its state supreme court? Must a federal trial judge do the same thing?
- What should a federal judge do if state common law is unclear?
- What is meant by “Erie prediction?” Blindly follow? Guess? Predict?
- What is the rule of Klaxon? Do federal courts sitting in diversity always apply the substantive law of the state in which the federal court sits? Or must they first apply the choice-of-law principles used by that state? Under what circumstances might a federal district court in Florida apply the tort law of Pennsylvania?
Updated March 21, 2015