Erie Railroad Co. v. Tompkins
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| Erie Railroad Co. v. Tompkins | ||||||||||||||
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| Argued January 31, 1938 Decided April 25, 1938 |
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| Holding | ||||||||||||||
| Under the Rules of Decision Act, federal district courts in diversity jurisdiction cases must apply the law of the states in which they sit, including the judicial doctrine of the state's highest court, where it does not conflict with federal law. There is no general federal common law. Second Circuit Court of Appeals reversed and remanded. | ||||||||||||||
| Court membership | ||||||||||||||
| Chief Justice: Charles Evans Hughes Associate Justices: James Clark McReynolds, Louis Brandeis, Pierce Butler, Harlan Fiske Stone, Owen Josephus Roberts, Benjamin N. Cardozo, Hugo Black, Stanley Forman Reed |
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| Case opinions | ||||||||||||||
| Majority by: Brandeis Joined by: Hughes, Black, Stone, Roberts Concurrence by: Reed Dissent by: Butler Joined by: McReynolds Cardozo took no part in the consideration or decision of the case. |
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| Laws applied | ||||||||||||||
| U.S. Const. art. III (implied); Judiciary Act of 1789 § 34 (now ); Rules of Decision Act (now ) | ||||||||||||||
Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), was a decision by the Supreme Court of the United States in which the Court held that federal courts did not have the power to make up general federal common law when hearing state law claims under diversity jurisdiction. In reaching this holding, the Court overturned almost a century of federal civil procedure law, and established what remains the modern law of diversity jurisdiction for United States federal courts.
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[edit] Background of the case
Erie began as a simple personal injury case. As explained by the Second Circuit in its decision below, Harry Tompkins was walking next to the Erie Railroad's Erie and Wyoming Valley Railroad tracks in Hughestown, Pennsylvania, at 2:30 a.m. on July 27, 1934. A friend of Tompkins had driven him to within a few blocks of his home, which was located on a dead-end street near the tracks. Tompkins chose to walk the remaining distance on a narrow but well-worn footpath adjacent to the tracks. A train approached, and in the darkness an object protruding from one of the cars suddenly struck Tompkins. When he fell down, his right arm was crushed beneath the wheels of the train.
The train was owned by the Erie Railroad company, a New York corporation. Tompkins sued this railroad company in a federal district court - the United States District Court for the Southern District of New York. The district court, following the federal law at that time, applied neither New York nor Pennsylvania common law, but instead applied federal common law, which used an ‘ordinary negligence’ standard for the duty of care owed to persons walking along railroad tracks, instead of Pennsylvania ’s common law ‘wanton negligence’ standard for the duty of care to trespassers. The case was decided by a jury which was instructed by Judge Samuel Mandelbaum in accordance with this negligence standard. The jury found in favor of the plaintiff and awarded him damages. The railroad appealed to the Second Circuit, which affirmed. The railroad then petitioned the Supreme Court for certiorari, which was granted, and Justice Benjamin Cardozo granted the railroad a stay of its obligation to pay the judgment in Tompkins' favor until the Supreme Court decided the case.
[edit] Issue
It had long been settled that when a federal court hears a state cause of action brought in diversity, the statutory law of the state would be applied. However, in the case of Swift v. Tyson, 41 U.S. 1; 10 L. Ed. 865; 1842 U.S. LEXIS 34 (1842), the Supreme Court had held that the federal courts need not also apply the court-made common law of the states. This had led to forum shopping, where plaintiffs would seek to sue in federal court instead of state court in order to have a different substantive law applied. In light of this inequity, the Supreme Court had to determine whether federal courts should apply state common law.
[edit] The Court's decision
The Court, in an opinion by Associate Justice Brandeis, examined the manipulations that had resulted from the rule of Swift v. Tyson and determined that "in attempting to promote uniformity of law throughout the United States, the doctrine had prevented uniformity in the administration of the law of the state." This had the effect of denying litigants equal protection of the law.
In Swift, Justice Joseph Story had sought to interpret the Rules of Decision Act. This Act, which began as Section 34 of the Judiciary Act of 1789, is now codified at and is as follows:
- The laws of the several States, except where the Constitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts of the United States, in cases where they apply.
Story interpreted the words "laws of the several States" narrowly, treating them as referring to only the statutory law of states and not the judge-made law declared by state supreme courts. Thus, where the state legislature had not passed a statute that controlled the case, a federal district court was free to make up its own common law.
Story apparently hoped that when hearing state law claims in diversity jurisdiction, federal district courts would fashion a uniform "general law." As interstate commerce continued to increase, the common law of the states would converge with such general federal common law because states would recognize it was in their own best interest.
By 1938, as Brandeis acknowledged, "the mischievous results of the doctrine had become apparent." The problem with Swift was that rather than reducing forum shopping, it had only increased it. State judge-made law continued to diverge instead of converge. Allowing federal courts to make up their own independent judge-made law only made the problem worse. Parties who felt disadvantaged by a state judge-made rule could create diversity jurisdiction in the federal courts by simply moving to another state or reincorporating there (if a party was a corporation). In the worst cases a party who had lost in the state supreme court would simply begin all over again in the federal courts; since the federal district court had its own set of common law rules, it could hold that it was not bound by the state supreme court ruling. This practice was mentioned in dissent by Brandeis' friend on the court, Holmes, in the Kentucky Brown and Yellow Taxicab case.
The facts of Erie itself were an example of the kind of clever forum shopping which the Court wished to end. Pennsylvania clearly had personal jurisdiction over the railroad because of its operations there; also, the accident happened there, and Tompkins was a Pennsylvania resident. But Tompkins chose to sue in a New York federal court to take advantage of its favorable rule — knowing that he would lose under Pennsylvania's rule.
Therefore, the Court felt it was time to overrule the doctrine of Swift as an unconstitutional extension of its own powers. Swift had stolen powers reserved to the states in violation of the Tenth Amendment - nothing in the Constitution of the United States permits the U.S. Congress to empower federal courts to create their own common law - and had denied state residents the equal protection of the laws, but not under the Fourteenth Amendment because the Fourteenth Amendment at that time only applied to states and not the federal courts. Therefore, the federal court was required to apply the law of whichever state it was sitting in, as though it were a state court of that state. Of course, this was a very difficult decision for the Court because overruling Swift meant that a huge number of opinions by the lower federal courts were no longer valid law.
However, the Court did not declare that the Rules of Decision Act itself was unconstitutional. Instead, it reinterpreted the Act so that federal district courts hearing cases in diversity jurisdiction had to apply the entire law, both statutory and judge-made, of the states in which they sit.
[edit] Reed's concurrence
Associate Justice Stanley Reed filed a concurrence in which he agreed that Swift had to be reversed, but argued that Swift was merely an erroneous interpretation of the Rules of Decision Act, not an unconstitutional one.
[edit] Butler's dissent
Associate Justice Pierce Butler filed a dissent, joined by Associate Justice James McReynolds, in which he argued that the majority had engaged in judicial activism. The majority had completely rewritten the two questions presented in the petition for certiorari as a constitutional question, when there really was no constitutional issue. He pointed out that no one in this case had directly challenged the Swift regime, which the Court had adhered to for so long in so many cases.
[edit] Subsequent developments
[edit] On remand
The case was remanded to the Second Circuit for a ruling on the merits of Pennsylvania law. Rather than applying New York law, the Court of Appeals applied the law of Pennsylvania as required by the choice-of-law rules of the time — under which the law of the place of the accident was determinative — and threw out Tompkins' case.
[edit] Subsequent jurisprudence
Later opinions limited the application of Erie to substantive state law; federal courts can generally use the Federal Rules of Civil Procedure while hearing state law claims.
It can be a problem for federal courts to know what a state court would decide on an issue of first impression (i.e., one not previously considered by state courts). In such circumstances, federal courts engage in what is informally called an "Erie guess." This "guess," actually a carefully reasoned attempt to anticipate what the state's courts would decide, is not binding on state courts themselves, which may adopt the federal court's reasoning if and when the issue reaches them in some other case, or may decide the issue differently. In the latter case, future federal courts would be required to follow the state's precedents, although a final judgment in the "guessed" case would not be reopened.
Alternatively, federal courts can certify questions to a state supreme court, so long as the state itself has a procedure in place to allow this. For example, some federal district (trial) courts can certify questions to state supreme courts, but other states allow only federal courts of appeal (circuit) courts to do so. In the latter situation, an Erie guess would be the only option available for the federal court attempting to apply state law.
[edit] See also
[edit] External links
- Younger, Irving, What Happened in Erie, 56 Texas L. Rev. 1011 (1978) (law review article giving background to the case, also available as a videotaped or audiotaped lecture by Younger)
