Law Applied in Federal Court

Question 1

In a federal case sitting in diversity jurisdiction, what are the steps a judge should take to determine if it should apply federal or state law?

Erie Doctrine

Answer 1

(1) Is there a federal law on point that directly conflicts with state law? (if so, apply federal long as long as valid)

(2) If there is no federal law on point, the federal judge must apply state law to substantive issues.

(3) If there is no federal law on point, the federal judge must determine if the issue is substantive or procedural.

Question 2

What are the 5 “clearly substantive” issues where a federal court must apply state law?

Answer 2

1. Conflict or choice of law rules;
2. Elements of a claim or defense;
3. Statutes of limitation;
4. Tolling of statutes of limitations;
5. Standard of granting a new trial because the jury’s award was excessive or inadequate.

Question 3

What will the judge look to in determining whether an issue is substantive or procedural?

Answer 3

(1) Outcome determinative test;

(2) Weighing the balance of interests factors;

(3) Avoiding forum shopping.

Question 4

What is the outcome determinative test?

Answer 4

When a federal judge is determining whether an issue is substantive or procedural, they should consider whether applying or ignoring this state rule affect the outcome of the case, if so, probably a substantive issue and should apply state law.

Question 5

What are the balance of interest factors?

Answer 5

Does either the federal or state system have a strong interest in having its rule applied? greater interest should probably be applied

Question 6

What is forum shopping?

Answer 6

If the federal court ignores state law on this particular issue, will it cause parties to flock to federal court? (if so, should probably apply state law)