State law in federal court

Question 1

What law is applied under federal question jurisdiction?

Answer 1

FEDERAL LAW

Question 2

Erie doctrine rule on which state’s substantive law to use

Answer 2

Federal courts exercising diversity must apply the SUBSTANTIVE law of the STATE IN WHICH IT SITS

Looks to state court’s highest ruling for interpretation

If substantive law is unclear, look to court decisions to predict how state’s highest court would rule

Question 2

Substantive law designation under Erie

Answer 2

Any state law that defines LEGAL RIGHTS and obligations of parties (elements, burdens, etc)

Question 3

Procedural law designation under Erie

Answer 3

Applies only in STATE court, NOT federal court

Question 4

Statutes of limitations: procedural or substantive?

Answer 4

Traditional choice of law: PROCEDURAL

Erie: SUBSTANTIVE

Question 5

Purpose of Erie

Answer 5

prevent forum shopping!

Question 6

When is a state statute substantive under Erie?

Answer 6

When it is OUTCOME DETERMINATIVE (in direct/certain way that encourages forum shopping)

Question 7

Wrinkle 1: outcome-determinative Erie exception

Answer 7

When state law is ARGUABLY substantive (outcome determinative without defining rights/obligations), court may apply judge-made FEDERAL COMMON LAW after applying BALANCING TEST

Question 8

Wrinkle 2: outcome-determinative Erie exception

Answer 8

A codified federal rule that applies directly to issue in question MUST be applied in federal court

Question 9

Klaxon Rule

Answer 9

Federal district in which diversity case sits MUST apply choice of law rules of STATE IN WHICH IT SITS

Question 10

Klaxon rule exception (transfer)

Answer 10

If diversity case properly filed and venue is transferred, FIRST STATE’s choice of law rules apply

Question 11

Are choice of law rules substantive?

Answer 11

YES!

This is why court sitting in diversity must apply choice of law for state in which it sits