Law Applied in Federal Court

Question 1

In Federal Court what law applies?

Answer 1

Assume that we have a diversity of citizenship case in federal court. Remember, the claims in a diversity case will be based on state law.

Now assume the federal judge must decide a particular issue - must the judge follow state law or is she free to ignore state law?

Look to Erie Doctrine for answer

Question 2

Erie Doctrine

Answer 2

Step 1: Ask - is there some federal law (like the constitution, federal statute, FRCP, or FRE) on point that directly conflicts with state law? If so, apply the federal law, as long as it is valid. (This is based on the supremacy clause).

STEP 1 NOTE: How do we know if an FRCP is valid? The FRCP are presumptively valid and OK if they are arguably procedural (none has ever been invalid).

Step 2: If there is no federal law on point, the federal judge must apply state law if the issue to be decided is “substantive.”

Step 3: If there is no federal law on point and the issue is not one of the 5 substantial issues, the federal judge must determine whether the issue is substantive by weighing:

a) outcome determinative - would applying/ignoring state ruel affect outcome of the case?

b) Balance of interests - does either the fed or state have strong interest in having its rule applied?

c) Avoid forum shopping - if the fed court ignores state law, will it cause parties to forum shop?

Question 3

5 clearly substantive issues - Erie Doctrine

Answer 3

Conflict (or choice) of law rules

Elements of a claim or defense

Statutes of Limitation

Rules for tolling statutes of limitations; and

The standard for granting a new trial because the jury’s damages award was excessive or inadequate.

Question 4

Federal Common Law

Answer 4

Erie means there is no general federal common law, but there are areas in which fed courts are free to make up common law on their own.