Erie And Hanna - Civil Procedure

ERIE AND HANNA

Governing Law in a Diversity Case

Another forum for division-of-powers tension in Federalism

• Constitutional provisions always trump state laws (except 7^th amendment only applies to Federal courts); Federal statutes govern, as long as they are valid (arguably procedural).

Rules of Decision Act (28 USC § 1652)

The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply.

Rules Enabling Act (28 USC § 2072)

a) The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts (including proceedings before magistrate judges thereof) and courts of appeals.

(b) Such rules shall not abridge, enlarge or modify any substantive right. All laws in conflict with such rules shall be of no further force or effect after such rules have taken effect.

1. Swift v Tyson (1842)

• Judges applied state statutes if there was one on point, but federal common law, used the procedural rules of the state in which they sat

• Tension b/w states rights and fostering interstate commerce

2. Black & White Taxicab Co. v Brown & Yellow Taxicab Co.

• Black and Yellow had an exclusive dealings contract with a railroad. Kentucky common law didn’t enforce those clauses, so it reincorporated in Tennessee to get diversity, then brought suit in federal court in Kentucky, since federal common law did enforce them

3. Erie v Tompkins (1938)

• Brandeis thinks Swift v Tyson not pragmatic, and violates equal protection, 10^th Amendment powers reserved to states; b/c of new scholarship, we should understand the RDA differently

• Substantive question was duty to trespasser near railroad tracks. No duty in PA.

• Powers to make law are reserved to state, no reason common law should be different from statute;

• Twin aims of Erie (as described in Hanna):

  • Prevent forum shopping

  • Ensure equal protection of laws by not having one set of laws if you sue from in state and different set of laws if you sue from out of state

4. Sibbach v Wilson (1941)

   • A valid FRCP governs, regardless of the state law (Scalia’s interpretation), as long as it “really regulates procedure.” That is, judicial process for enforcing rights….and administering remedy and redress. FRCP are valid unless they abridge, enlarge, or modify a substantive right under the REA.

5. Guaranty Trust v. York (1945)—outcome determinative test

• Court must apply the state rule where applying the federal instead of state rule would significantly alter the outcome of the case

• Case was about statute of limitations

• Policy, not Constitutional, decision. Fed courts do have power to set necessary procedural laws, but court opted for state laws out of desire for uniform outcomes

6. Ragan v Merchants Transfer (1949)

   • Pro-states, follows outcome-determinative

   • Despite Rule 3, statute of limitations is not tolled upon filing of complaint in federal court, b/c Kansas law provided statute was not tolled until complaint served; doing so would prolong the statute longer than Kansas law would have it

7. Commissioner v Bosch (1957)—what is state law?

   • Federal courts should apply the law as announced, or as it would be announced by the sate’s highest court. Can also ask the state court to certify it—essentially clarify the law

8. Byrd v Blue Ridge (1957)

• Rejects rigid application of York outcome-determinative test, instead calling for balance of competing state and federal policies, particularly where any difference in outcome was speculative. Court concludes that SC’s weak interest in judicial determination of whether this claim had to be workers comp instead of tort is outweighed by strong federal preference for 7^th Amendment right to have a jury make this decision (SC rule said judger, FRCP said jury). Procedural or Substantive?

9. Hanna v Plumer (1965)—direct collision and arguably procedural

• Court says York, Ragan, other post-Erie cases were not about direct collision, so this is a new issue. Hanna court says their “arguably procedural” rule applies only to direct collision.

• Issue was NH required service in person, federal rules permitted serving on another adult in the household

• Think about the twin aims of Erie in determining whether rule is procedural or substantive

• Modified outcome-determinative test. Would the difference in...