Civil Procedure II Outline

ERIE
 
ERIE DOCTRINE:
Only in diversity cases, not federal question
Federal court needs to determine an issue and the question is whether they apply state law
rule (Erie v. Tompkins): Must apply state law on matter of substantive law
Reasons:
                                                              i.      Rules of Decision Act (RDA) §1652 – if no federal law on point, apply state law
                                                            ii.      Constitution – 10th amendment – power not given to federal gov’t is retained by state
What is substantive law?
Elements of a claim and defense
Starting point:
Hanna v. Plumer: 
2 Prongs:
                                                              i.      HANNA PRONG: Is there a federal statute on point?
1.      If yes, apply that directive so long as it’s valid
2.      if in FRCP, to determine if valid, see if it fits in Rules Enabling Act (REA) §2072
a.       gives SCOTUS right to make FRCP
b.      FRCP is valid if arguably procedural
                                                                                                                                      i.      Always is, as written by SCOTUS
c.       Federal statute valid if congress made it
3.      if NO, and judge wants to ignore state law, if state law is a matter of substance, must apply it
                                                            ii.      ERIE PRONG: is it a matter of substance
1.      elements of a cause of action are substantive
2.      Outcome determinate – something is substantive if it is outcome determinative
a.       Guaranty Trust v. York – state SoL expired so cannot go forward. F. judge wanted to let the case go but SCOTUS says NO. SoL is substantive as it is outcome determinative (so must apply state law)
b.      Failing to use state law would lead to different outcome
3.      Balance the interest
a.       Byrd v. Blue Ridge – under state law, judge decided issue. F. judge wanted to ignore state law and leave it to jury. SCOTUS: can ignore state law as it is not substantive
                                                                                                                                      i.      Matters of who can decide a case is up to state law unless federal interest in doing it differently
b.      Balance state interest and federal interest
4.      Twin aims of Erie:
a.       Hanna v. Plumer –
b.      Avoid forum shopping
                                                                                                                                      i.      At the outset of the case, if the federal court ignores state law, will it cause litigant to flock to federal court? 
1.      If so, this is bad
c.       Avoid inequitable administration of the law
d.      Application:
                                                                                                                                      i.      At the outset, ask if F. judge ignores state law, will it cause litigants to flock to federal court (forum shopping) à if so, apply state law
 
HYPO: 
1. In F court for diversity. Class action in the making. Under FRCP 23, the case meets all class action requirements. Under state law, it does not meet the requirements. What do we do?
à Is there federal directive on point? YES, FRCP 23. 
à So go to Hanna prong. Federal law governs as long as it’s valid. It is arguably procedural as it’s in the FRCP so it wins. 
            (no need to run the Erie prong)
 
2. In NY, legislature worried about malpractice premiums and doctors are leaving. NY passes statute which provides that in med/mal case, prior to trial, must go to arbitration hearing. If you don’t like the result, then go to trial. But that decision will be admitted at trial. PA citizen suffers malpractice in NY by NY doctor. Brings diversity case in Federal Court in NY. Doctor wants to go to arbitration procedure. Does the federal judge have to go to arbitration procedure?
à Is there a federal directive on point? NO. Not a Hanna problem, so it is an Erie problem. 
à Is it substantive? NO.  
à Is it outcome determinative? Not clear.
à  Is there a federal interest? State has a HUGE interest, that’s why it created this statute. Federal interest is jury trial but state outweighs federal. 
à At the outset, if Federal judge ignores state law, will it cause people to flock to federal court? YES, all will go to federal court. Will promote forum shopping. 
à Is it inequitable admin of the law? Only non NY P’s will invoke federal but NY P’s cannot
 
CASES
1)   History: Swift v. Tyson-
a.       (U.S. 1841) interpreted §1652 Rules of Decision Act to say that federal courts only had to follow state statutes. Decisions by state supreme cts were not considered “laws” and federal cts were free to create their own common law. 
b.      Disadvantages:
1.   Non-citizens get the benefit of forum shopping on laws. 
2.   Violates equal protection. 
3.   Difficult for citizens to predict which standard of law they will apply
4.   Federalism – courts create common law where Congress could not pass a statute. This violates the allocation of power in the Constitution. 
5.   The law is considered an entity to be “found” of itself.
2)   Erie Railroad v. Tompkins (S.Ct., 1938, P 224)
Facts-      p (PA) hit by open door of Δ train while walking along RR tracks. Sue Δ (NY) in NY federal court. NY has a lower standard of negligence than PA, where accident occurred. 
Rule-       Narrow meaning: “the laws of the several states” for purposes of Rules of Decision Act §1652 à not only statutes but also CL of the state. Abolishes federal common law.
Finding- The lower ct erred in not applying PA state law.
3)   Outcome Determination: Guaranty Trust Co. v. York (S.Ct., 1945, P 232)
Facts-      П sued trustee in fed diversity action in NY, where NY substantive law governed. Δ invoked NY SoL; П said that NY SOL did not apply b/