Guaranty Trust Co. v. York

Guaranty Trust Co. v. York - the federal court should be...

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Civil Procedure 11/6/08 Erie Doctrine Guaranty Trust Co. v. York (1945) Facts : Plaintiffs sued a bond trustee in a diversity case alleging misrepresentation and breach of trust. New York substantive law applied. The defendant invoked the NY statute of limitations, and the plaintiff argued that the statute of limitations didn’t bar the suit because it was on the “equity side” of federal court. (Equity courts didn’t think they were strictly bound by state statutes of limitations). Procedure : 2 nd Circuit said suit wasn’t barred by statute of limitations. Issue : whether, when no recovery could be had in a state court because the action is barred by the statute of limitations, a federal court in equity can take cognizance of the suit because there is diversity. Holding : reversed and remanded. Rule : a federal court is obligated to apply a state statute of limitations. Class Notes : The intent of Erie was to insure that, in all cases where a federal court is exercising jurisdiction solely because of diversity, the outcome of the litigation in
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Unformatted text preview: the federal court should be substantially the same as it would be if tried in a state court. Outcome-determinative test while a statute of limitations was usually considered a rule of procedure in other contexts, the court held that it should be treated as a substantive rule for Erie . Any rule that could affect the outcome should be considered substantive under Erie . Procedural Exception Erie applies only to matters of substance, not procedure . A federal court is free to ignore state procedural rules . However, if the procedural rules would affect the outcome, they are considered substantive rules. Hoffheimer Notes : If the rule is merely a manner and means of enforcing a state right, it is considered procedural by the federal courts and they dont have to apply it. *Does applying or not applying state law significantly affect the result of litigation. $100 filing fee in state; $200 in federal - procedural...
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