Erie Anal - Erie and Federalism-what law to apply when...

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Erie and Federalism—what law to apply when federal courts hear cases that are not based on federal claims. In federal diversity cases, what substantive law applies? Relevant Cases Swift v. Tyson (p. 374, paragraphs 1 and 2) 1) Wanted to standardized “natural law” 2) Follow State positive law 3) Federal courts applied federal common law (not state common law) 4) Problems— a) The law can be different b) Allowed law to be manipulated by plaintiffs Erie v. Tompkins (p. 455) 1) Why it overruled Swift a) Swift failed to create a standardized common law across the country b) Allowed justice to be discriminatory c) Unconstitutional—allowed judges to make law in areas where they didn’t have authority to make law. 2) If a federal claim and a state claim are filed in Federal Court under diversity, the federal laws will apply to the federal claim while the state laws will apply to the state laws. 3) Application: a) Federal court must apply horizontal choice of law rules of the state in which it sits b) Federal court not bound by state lower court decisions, only state supreme court i) A federal judge is to apply the state law as she concludes that it would be applied today by the supreme court of the relevant state. If she thinks the current applicable law would be overruled by the Supreme Court, then she is free to not apply that law. c) If no state supreme court decision, federal court must predict by: i) Look at trends of overruling within the jurisdiction ii) What are other state supreme courts doing? iii) Legislative developments iv) Dicta, treatises, law review articles 4) If a federal court’s (under diversity) decision is appealed, but the law changes before the appellate court hears the appeal, the appellate court must apply the new law . If, however, the law changes after a verdict w/ no appeal, the appeal will not be granted on theory that the law has changed ( finality more important than consistency) 5) Substance/Procedure a) Neither Congress nor the federal courts have the power to declare substantive rules of common law applicable in a state b) Rule in Erie is clearly substantive so it is easy Guaranty Trust v. York (p. 466) 1) Outcome Determinative Test: a) Anything that is outcome determinative is substantive b) Outcome of the litigation in the federal court should be substantially the same so far as legal rules determine the outcome of a litigation if it were tried in a state court c) If a choice between federal procedure or state procedure would “significantly affect the result of a litigation” --> apply state rule 1
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Erie and Federalism—what law to apply when federal courts hear cases that are not based on federal claims. In federal diversity cases, what substantive law applies? d)
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This note was uploaded on 08/28/2008 for the course LAW 433 taught by Professor Wooley during the Spring '08 term at University of Texas at Austin.

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Erie Anal - Erie and Federalism-what law to apply when...

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