Choice of law in federal court Flashcards
state the approach to the Erie doctrine that you should apply on an exam
(1) FED LAW ON POINT?
First, when confronted with a question that implicates the Erie Doctrine, we ask if there is some federal law on point that directly conflicts with state law? Specifically, FRCP, the Constitution, a federal statute, or a federal rule of evidence. If there is a conflict, the supremacy clause requires the court to apply the federal law, as long as it is valid.
FRCP is presumptively valid, none have ever been held invalid. FRCP can be applied in federal court as long as it is arguably procedural.
Arguably procedural rules include the pleading rules of Rule 8, and discovery rules.
(2) NOTE SUBSTANTIVE ISSUES
If there is no federal law on point, the federal judge must apply state law if the issue to be decided is “substantive,” rather than procedural. What state law? the law that would be applied by the courts of the state in which the federal court is located. Five issues are clearly substantive and the federal court must apply state law on those issues:
(a) conflict or choice of law rules
(b) elements of a claim or defense
(c) statutes of limitation**
(d) rules for tolling statutes of limitations
(e) standard for granting a new trial because the jury’s damages award was excessive or inadequate
**if the federal court has to apply state law on statute of limitations, the federal court asks (i) does the state law treat SOL as procedural such that that the forum state’s SOL applies, or (2) does the state law treat the SOL as substantive such that another state’s SOL applies?
(3) BALANCING TEST FOR HARD CASES
If there is no federal law on point and the issue is not one of the clear substantive issues, the judge must determine whether the issue is substantive. The judge will balance three factors:
(a) if applying or ignoring the state rule is outcome determinative = state rule is a substantive rule = state law applies
(b) balance of interests … the system with a stronger interest in having its rule applies should win [fed vs. state system]
(c) avoid forum shopping
if federal court ignores state law, will it cause parties to flock to federal court? if so, court should apply state law
background to when we need Erie
in a diversity case, claims will be based on state law, so federal judge is going to have to decide whether to apply state or federal law on that issue
when is federal court free to make up common law? [i.e. when is it ok not to apply state substantive law on a substantive issue?]
International relations, admiralty, disputes between states, the right to sue a federal officer for violating one’s federal rights.
In these areas, there is no role for state law. One important area of FCL is that FCL governs for preclusion (but in diversity cases, FCL follows state law on preclusion).
A resident of state A sued a resident of State b in federal district court in State b for breach of contract. Diversity jurisdiction. P alleged that the contract was entered into in state C and was to be performed in state B. P said that D failed to perform. what substantive law should federal district court apply?
the law that the state B state court would apply
court applies the law that would be applied by the courts of the state in which the federal court is located. this includes the state’s choice of law rules.
the federal court sitting in state B may end up applying law of state D or C, but if it does os, it will be because state B’s choice of law rules require that result.
