Federal Law Applies (in federal courts):


Substantive Law:

  • Rules of Decision Act
    • Federal Statute
    • Federal Constitution
    • Federal Treaty
  • Federal Common Law
    • Application of Uniform Federal Interest
    • Triggered by uniquely federal interest requirements: admiralty, intrastate, international, etc cases


Procedural Law:

  • Federal Statute
  • Federal Constitution
  • Federal Treaty
    • Rules Enabling Act
  • FRCP on point
    • Hanna: Doesn’t violate REA or Constitution
    • Doesn’t enlarge, abridge, violate a substantive right.
    • Arguably procedural.
  • Federal Common Law does not violate the twin aims of Erie
    • York Outcome Determinative Test: Doesn’t affect outcome of the case.
    • Byrd: Balance of interest – essential characteristic of the federal courts & federal interest outweighs the state interest
    • Twin Aims – Hanna
      • If flunks York test:
  • Won’t encourage forum shopping.
  • Not inequitable laws.


State Law Applies:

  • Everywhere else!



How does the federal court go about ascertaining state law when they have to apply it?

  • State Statute –
    • Just look at it and apply it.
  • Recent court decision of the highest court in the state –
    • Rely upon that as being the authoritative interpretation of the law.
  • When there’s no statute or recent decision of highest court of state:
    • Three options
      • Determine what the state lawis
        • (normally what it does)
        • Court will try to figure out how the state court would rule on the novel topic.
      • Certify
        • Send question down to the highest court of state and ask them for an answer as to what the law is on the issue.
        • Requires state to have a statute that authorizes certification process.
          • Statutes don’t require state court to answer, just gives authority to do so.
        • Certify answer back to federal court, and proceed with the case at hand.
          • Not used very often – time consuming.
        • CA has a certification statute.
      • Federal court can abstain from hearing the question all together.
        • Narrow couple of instances dealing with where state law issue is tied up in a regulatory scheme has the federal court decide that the state court resolve the issue.
        • When decision has to do with a lot of other state court issues.
        • Very rare.
        • Think of rule that they do normally have an obligation to rule on what the state law is.


Summary of Erie Analysis under Modern Law

The Erie doctrine invokes all four tests, depending on the circumstances:

  • Substance v. Procedure
  • Outcome Determinative
  • Balancing Test
  • Twin Aims


Substance v. Procedure:

  • First-stage screening device in Erie analysis.
  • An issue that clearly addresses legal rights is substantive, should use state law.
  • Issues that clearly are judicial process alone are procedural and invoke federal law.


Outcome Determinative:

  • Where the issue is not grounded entirely on substantive or procedural policies but instead derives from both, such as a statute of limitations
  • State law controls where it serves substantive interests (at least in part), and
  • Where refusal to do so would affect the outcome of the case.


Balancing Test

  • When the issue invokes the Erie doctrine but is not resolved by the substance-v. procedure or outcome determination tests, the policies underlying both the federal law and state law are examined.
  • The law of the court that has a greater interest is applied.
  • If federal law has a substantial interest – apply federal law; visa versa with state law.


Twin Aims

  • If it flunks the York test, the court will look to see if it upholds the twin aims of Erie:
    • Won’t encourage forum shopping
    • Not inequitable laws.
  • If it won’t violate one of these two aims, then the application of federal law is valid.


Conflict of Law:

  • If there is a federal rule on-point that conflicts with state law, the federal rule controls, IF
  • It is consistent with the REA and Constitution
    • Arguably procedural
    • Does not modify or enlarge any substantive right.




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