Erie Doctrine

Question 1

Federal Courts application of State substantive law

Answer 1

A federal district court with diversity jurisdiction generally must apply the substantive law of the state in which it is located unless a federal statute applies. In determining a state’s substantive law, the district court will be bound by the rulings of the forum state’s highest court.

Question 2

Conflicts between federal and state law

Answer 2

When the court is faced with a substantive or procedural question for the purpose of applying the Erie doctine, the district court should determine whether there is a conflict between state and federal law with respect to the issue before the court. If there is no conflict between state and federal law, then the analysis does not need to proceed any further because the court can apply both state and federal lawharmoniously to the issue.
If, however, the applicable state and federal laws do conflict, then the district court must ask whether a valid federal statute or Federal Rule covers the disputed issue.

Question 3

Applying state law versus federal law when there are no conflicts

Answer 3

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, a 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, then the district court will generally apply federal common law, rather than state law. If the answer is yes, then the court will apply state law, unless affirmative countervailing federal interests are at stake that warrant application of federal law