State law in federal courts

Question 1

Erie: substance–procedure distinction

Answer 1

For Erie purposes, the analysis is different from choice-of-law purposes:

A state statute is substantive under Erie if it is outcome determinative in a direct and certain enough way that it encourages forum shopping between state and federal courts.

Question 2

Erie: statutes of limitations

Answer 2

Whereas they are considered procedural under traditional choice-of-law analysis, under Erie, they are considered substantive.

Failure to apply the state statute of limitations would encourage forum shopping.

Question 3

Erie: federal interest

Answer 3

Although some state laws arguably may be substantive—i.e., outcome determinative without defining the rights or obligations of parties—a federal court may appropriate apply federal common law if necessary to protect a federal interest.

For example: If state law designates the judge as the factfinder while federal law requires a jury trial, the federal jury trial rule prevails.

Question 4

Klaxon

Answer 4

A federal court siting in diversity must apply the choice-of-law rules of the state in which it sits, as choice of law is outcome determinative—and thus substantive under Erie.

Question 5

Klaxon: venue transfer

Answer 5

If a diversity case was filed where venue was property but then transferred to another federal court in another state, the first state’s choice-of-law rules apply.