Law Applied in Federal Court

Question 1

If state law is applied, what state law must federal court apply?

Answer 1

State law of state in which federal court sits

Question 2

What law should the federal court apply?

Erie Doctrine

Answer 2

(1) Supremacy Clause: If federal law directly conflicts with state law, apply federal law.
* Look for Constitution, federal statute, FRCP that’s arguably procedural etc.

(2) If no federal law, apply state law for the following “substantive” issues:
* Conflict/choice of law rules
* Elements of claim or defense
* Statute of limitations (SOL)
* Rules on tolling SOL
* Standard for granting new trial on grounds that jury’s damages award was excessive or inadequate

(3) If not in the above five categories, federal judge must determine whether issue is “substantive” (grey area) - not tested on bar exam

SOL: SOL is substantive for Erie purposes, which means federal judge applies forum state law (not fed law) in a diversity case. BUT judge must next analyze the forum state’s conflict of law rules, which might call SOL a “procedural” issue so as to allow the forum state to apply its own SOL statute rather than follow that of another state. Fed judge must follow forum state’s determination of whether to call SOL procedural or not.

(3) Factors to consider (again, won’t be tested)
* Whether applying/ignoring state law would affect outcome of case (if yes, use state law)
* Whether fed or state system has stronger interest in applying its rules
* Whether ignoring state law would lead to forum shopping (parties flock to fed court) (if yes, use state law)

Question 3

In what areas are there federal common law?

Answer 3

• International relations
• Admiralty
• Disputes between states
• Right to sue a federal officer for violating one’s federal rights
• Preclusion (but in diversity cases, FCL follows state law on preclusion)

Under Erie, there’s no general federal common law

Question 4

What are the five categories of “substantive” state law for which federal court would apply state law?

Answer 4

• Conflict/choice of law rules
• Elements of claim or defense
• Statute of limitations (SOL)
• Rules on tolling SOL
• Standard for granting new trial on grounds that jury’s damages award was excessive or inadequate