Erie/Choice of Law Flashcards
What is the Erie doctrine in general?
The Erie Doctrine holds that when an action is commenced in U.S. District Court, the court must determine the substantive law and rules of procedure that govern the action.
How does the Erie Doctrine apply to Federal Question Claims?
If the action is a federal question claim, then federal substantive and procedural law will control.
According to Erie, what substantive law must be applied in a Federal diversity claim?
In a diversity action, the district court is required to apply the substantive law of the state in which the district court is located.
What procedural law is applied under Erie?
With regard to procedure in a diversity action, if a procedural issue is addressed by a valid federal law (like a statute or a federal rule of evidence), then the federal law will be applied.
If no federal law applies, then the general rule is that the district court must follow state law with regard to substance, but it can choose to ignore state law with regard to procedure under certain circumstances.
How does one determine if an issue involves substance or procedure when there is no conflict between state and federal law?
The district court will start by determining whether there is a conflict between state and federal law with respect to the issue before the court. If no conflict exists, then the analysis does not need to proceed any further b/c the court can apply state and federal law harmoniously.
How does one determine if an issue involves substance or procedure when there IS a conflict between state and federal law?
The district court must ask whether a valid federal statute or Federal Rule covers the disputed issue.
If there is a valid federal statute or rule of procedure on point, then the court must apply federal law rather than state law.
If, however, there is no federal statute or rule on point, then the court must determine whether federal common law, rather than state law, should be applied. In making this determination with respect to federal common law, the district court will ask whether the failure to apply state law will lead to different outcomes in state and federal court.
If the answer is no (the outcome would be the same), then the court will generally apply federal common law rather than state law.
If yes, though, the the court will apply state law, unless affirmative countervailing federal interests are at state that warrant application of federal law.
What is the alternative method of determining whether to apply state or federal law?
The court may also choose to examine the issue by weighing the interests of the state and federal judiciaries and apply the law whose policy is of greater importance. So, if the state has a greater interest in having its rule applied, then the court will apply state law. Otherwise, the court will apply federal law.
How does Erie prevent forum shopping?
The court will follow state law if selecting state law would prevent overcrowding of the federal court system.
What are the specific areas of law that have been held to be substantive rather than procedural?
- Elements of a claim or defense. EX: the elements of a claim or defense in contract or tort are considered substantive and are generally controlled by state law in a federal diversity action.
- Statutes of Limitations and Tolling Provisions: SC say they are substantive and therefore applicable in diversity.
- Burden of Proof: The specification of the application of standards of proof is considered a substantive matter, and the law of the forum state will govern in a diversity case.
What are the specific areas of law that have been held to be Procedural rather than substantive?
- Judge-Jury allocation: If there is a jury in a diversity case on a state-law claim, then the jury, rather than a judge, will decide all factual issues in the case, regardless of whether state law would provide otherwise.
- Assessment of Attorney’s Fees: In a diversity case on a state law claim, then the federal court may properly use its inherent power to assess attorney’s fees as a sanction for a defendant’s bad-faith conduct during litigation, even if the law of the forum state provides that attorney’s fees may not be awarded to a successful party.
- Equitable versus Legal: Federal law usually governs whether an issue is legal or equitable.
Under Erie, a U.S. district court with diversity jurisdiction must apply the substantive law of the state in which it is located. EX: the U.S. District Court of Delaware will generally apply Delaware substantive law to the diversity actions over which it sits. How is the applicable state law determined generally?
In general, in determining a state’s substantive law, the U.S. district court will be bound by the rulings of the state’s highest court.
Under Erie, a U.S. district court with diversity jurisdiction must apply the substantive law of the state in which it is located. How is the applicable state law determined when the state’s highest court has not yet ruled?
If the state’s highest court has not yet spoken on an issue, the fed court must try to determine how the state’s highest court would rule on the issue. To make this determination, the federal court will generally look to any lower state-court decisions that have considered the issue and will follow a lower court’s view, unless it believes the highest state court would not follow it.
if NO state court has considered the issue, then the federal court will have to determine how it believes the highest state court would rule. Some states that procedures that allow the federal district court to certify a question of substantive law to the state supreme court for clarification.
Under Erie, a U.S. district court with diversity jurisdiction must apply the substantive law of the state in which it is located. How is the applicable state law determined when the state’s highest court rules after a federal suit is complete?
If, after the U.S. district court action has been completed, the state’s highest court rules on an issue in a way that is different from the way the district court predicted, then a federal appeals court is bound by the state court’s ruling.
Under Erie, a U.S. district court with diversity jurisdiction must apply the substantive law of the state in which it is located. How is the applicable state law determined when there is a conflict of laws?
In diversity actions, a U.S. District Court is bound by the conflict of laws rules of the forum state, but only if those rules are valid under the full-faith-and-credit clause of the constitution.
How is Erie applied when venue is transferred?
If the venue of an action is transferred under Section 1404, then the court to which the action is transferred must apply the law of the state of the original court, including that state’s rules on conflict of laws. But, if the original venue was not appropriate, then the second state’s conflict of laws rules apply
