Federal Court Sitting in Diversity
Apply federal law as long as it’s
valid.
Decided under supremacy
clause
Federal Directive on Point
direct clashes with State law?
Whether the issue is substantive?
Rule of Decision Act
Erie: if substantive, must apply
state law; if not substantive, federal
law. (could ignore state law)
Constitution,
Statute,
Ruling.
FRCP
Always
Valid
Rule Enabling Act (28 U.S.C
2072) test
Rule valid if rule does not
modify substantive right
Federal Law
Shady Grove: “Arguably
Procedural?”
Hanna: FRCP are presumptively
valid and always trump
conflicting state provisions
Federal Law
No
Yes
Can refuse to [apply the
federal rule] only if the
Advisory Committee, this
court, and congress erred
in their prima facie
judgement
Erie
Twin Aims of Erie
discourage forum shopping
avoid inequitable administration
of law
York.
Outcome Determinative Test
if outcome changes based on
applying state/ federal law.
[will jury/judge come to same
conclusion?]
Critics: too board. Weak
Outcome does
NOT change.
[not substantive]
Federal Law
Outcome
changes.
[substantive]
No.
[substantive]
encourage OR
inequitable
Unfair to in-state
citizen
State Law
State Law
Evaluate and Conclude
Yes.
[not substantive]
Federal Law