Choice of Law: Erie Doctrine

General

1. Federal question—federal substantive and procedural law controls, as well as federal common law (CL)

2. Diversity jurisdiction—state substantive law and applicable federal procedural law

3. Supplemental jurisdiction—state substantive law for state-law claim

Valid federal statute on point when state and federal laws conflict

• Apply federal law

• Before applying Federal Rule (rather than federal statute), court must determine Rule is valid under Rules Enabling Act: does Federal Rule abridge, enlarge, or modify any substantive right?

o If no, then apply Federal Rule

o If yes, then apply Federal Rule if it only incidentally affects litigant’s substantive rights

No federal rule on point

—apply state law if failure to do so would lead to different outcomes in state and federal court

Substantive law

—elements of claim or defense, statute of limitations (SoL) and tolling provisions, and burden of proof

Procedural law

—judge and jury allocation, assessment of attorney’s fees, equitable or legal determination

Federal CL

In general

• Created when there is no applicable federal statute or constitutional provision

• There is no general federal CL; general areas that federal CL is applicable to will be

limited

Federal question—apply federal CL in the following instances:

• Admiralty cases

• When U.S. is party to the case

• Interstate disputes

• Cases implicating relations with foreign countries

• Cases in which government acts in proprietary role (e.g., enters into contracts, issues commercial paper, and oversees regulatory programs)

• When Congress has left a gap in statutory scheme

Federal CL - Diversity jurisdiction

—when a uniquely federal interest is at stake and significant conflict exists between that interest and operation of state law

Federal CL - State-court cases

—if state jurisdiction is concurrent with federal question jurisdiction and federal CL would have applied in federal court, then it will also apply in state court

State conflict of law rules

—federal court must apply state’s conflict of law rules

State conflict of law rules - DJ

—district court bound by conflict of laws rules of state where district court is located but only to extent that state’s rules are valid under Full Faith and Credit Clause and Due Process Clause

State conflict of law rules - Procedural or substantive law

—states apply their own procedural laws and sometimes apply the substantive law of foreign jurisdiction

• DE Point of Law—written choice of law agreements between parties to contract involving at least $100,000 are generally enforceable