Law Applied by Federal Court

Question 1

What is the Erie Doctrine?

Answer 1

The Erie doctrine states that a federal court that hears a state law claim in a case based on diversity or supplemental jurisdiction must apply the substantive law of the state in which the court sits. Under the Erie doctrine, state law applies if it is a law that deals with the substantive rights of state citizens. Federal courts use federal, not state, procedural rules.

The Erie doctrine applies only where the following are both present:

1. the court has subject matter jurisdiction over a case based on diversity or supplement jurisdiction; and
2. the state law that would apply conflicts with the federal rule, statute, doctrine, or procedure at issue.

STEP ONE Rule:

If a valid federal state or constitutional provision is on point, the federal court must apply the relevant provision; it is irrelevant whether the provision is substantive or procedural.

Validity and Invalidity - If the rule abridges, modifies, or enlarges a substantial right.

On Point - this is a question of interpretation. Does the rule apply to the claim?

STEP TWO: if there is no valid, on point federal law, follow ordinary practices unless doing so would lead to forum shopping or fundamental unfairness.