Erie Doctrine
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The Erie doctrine is a legal principle derived from the landmark US Supreme Court case Erie Railroad Co v Tompkins (1938). The doctrine addresses the conflict between federal and state laws in cases heard in a federal court, where there is diversity of citizenship jurisdiction involving parties from different states.
Prior to the Erie decision, federal courts hearing diversity cases applied federal common law, which consisted of judge-made law derived from general principles and customs. However, in Erie Railroad Co v Tompkins, the Supreme Court rejected the concept of federal common law and held that federal courts sitting in diversity must apply state law, including state statutory and decisional law. The key principles of the Erie doctrine can be summarised as follows:
Outcome-determinative test: Under the Erie doctrine, in diversity cases, federal courts must apply state substantive law. Substantive law encompasses the legal rules that govern the rights and obligations of the parties, and it varies from state to state. Federal courts must apply the substantive law of the state in which they sit, as the outcome of the case may be different if federal law were applied instead.
Reverse-Erie: While federal courts must apply state substantive law, they still apply federal procedural law. The Erie doctrine distinguishes between substantive and procedural matters. Federal courts apply their own procedural rules (governed by federal statutes, rules, and constitutional provisions) even in diversity cases.
Twin aims of Erie: The Erie decision identified two primary aims: preventing forum shopping and promoting the equal application of the law. Forum shopping refers to the practice of litigants choosing a particular court based on the expectation that its decision will be more favourable. By applying state law, the Erie doctrine aims to discourage litigants from seeking out federal courts solely to obtain a more favourable outcome.
Erie in federal question cases: The Erie doctrine primarily applies to cases based on diversity of citizenship jurisdiction. In cases involving federal questions (where the claim arises under federal law), federal courts continue to apply federal law. However, federal courts may consider relevant state law if it fills a gap or supplements federal law.
The Erie doctrine has significant implications for the relationship between federal and state law in the United States. It reflects a commitment to respect the diversity of state legal systems and maintain the balance between federal and state jurisdiction. It ensures that in diversity cases, federal courts do not create their own substantive law, but rather apply the laws of the state where the court is located. The Erie doctrine remains an essential principle in determining the appropriate application of law in the federal court system.
Prior to the Erie decision, federal courts hearing diversity cases applied federal common law, which consisted of judge-made law derived from general principles and customs. However, in Erie Railroad Co v Tompkins, the Supreme Court rejected the concept of federal common law and held that federal courts sitting in diversity must apply state law, including state statutory and decisional law. The key principles of the Erie doctrine can be summarised as follows:
Outcome-determinative test: Under the Erie doctrine, in diversity cases, federal courts must apply state substantive law. Substantive law encompasses the legal rules that govern the rights and obligations of the parties, and it varies from state to state. Federal courts must apply the substantive law of the state in which they sit, as the outcome of the case may be different if federal law were applied instead.
Reverse-Erie: While federal courts must apply state substantive law, they still apply federal procedural law. The Erie doctrine distinguishes between substantive and procedural matters. Federal courts apply their own procedural rules (governed by federal statutes, rules, and constitutional provisions) even in diversity cases.
Twin aims of Erie: The Erie decision identified two primary aims: preventing forum shopping and promoting the equal application of the law. Forum shopping refers to the practice of litigants choosing a particular court based on the expectation that its decision will be more favourable. By applying state law, the Erie doctrine aims to discourage litigants from seeking out federal courts solely to obtain a more favourable outcome.
Erie in federal question cases: The Erie doctrine primarily applies to cases based on diversity of citizenship jurisdiction. In cases involving federal questions (where the claim arises under federal law), federal courts continue to apply federal law. However, federal courts may consider relevant state law if it fills a gap or supplements federal law.
The Erie doctrine has significant implications for the relationship between federal and state law in the United States. It reflects a commitment to respect the diversity of state legal systems and maintain the balance between federal and state jurisdiction. It ensures that in diversity cases, federal courts do not create their own substantive law, but rather apply the laws of the state where the court is located. The Erie doctrine remains an essential principle in determining the appropriate application of law in the federal court system.
