Law Applied in Federal Court

Question 1

What is the Erie Doctrine rule?

Answer 1

1. A Federal Court exercising diversity jurisdiction applies STATE SUBSTANTIVE law of the jurisdiction where is it located.
2. For federal question or an issue concerning Federal Civil Procedure, the Court applies FEDERAL PROCEDURAL law, proved that the federal rule is VALID.

Question 2

For the purposes of assessing the Erie doctrine (which law to apply in Federal Court), when is a federal rule “valid?”

Answer 2

Under the Rules Enabling Act, a federal rule is valid if it deals with “PRACTICE or PROCEDURE” and does not “abridge, enlarge or modify” a SUBSTANTIVE RIGHT.

Question 3

There are 3 steps to consider when determining if a judge should apply state or federal law in a case? State the first step in detail.

Answer 3

Step 1: Is there some federal law which preempts/conflicts with the state law?

Question 4

There are 3 steps to determining whether a judge should apply state or federal law in a case. State the second step in detail.

Answer 4

Step 2: If there is NO FEDERAL LAW on point, then the judge must apply State law to a substantive issue.

Which points are substantive?
— Elements of a claim or defence
— Statute of Limitations
— Rules for tolling statutes
— Conflict of law

Question 5

There are 3 steps to determining whether a judge should apply state or federal law in a case. State the third step in detail.

Answer 5

Step 3: The judge decides if the issue is substantive by weighing the following factors:

— OUTCOME DETERMINATIVE: meaning, would applying or ignoring state law affect the outcome? If so, probably a substantive issue

— BALANCE of INTEREST: Does either the Federal or State system have a strong interest in their rules applied?

— AVOID FORUM SHOPPING: Would applying one law cause parties to flock to federal court?