Erie Railroad Co. v. Tompkins (1938)

Summary

Erie involves the question of what “law” applies to a case in “diversity jurisdiction,” that is, in a federal court case involving citizens of different states. Prior to Erie, the rule was that federal courts had to follow state statutes where those statutes applied, but they did not have to follow the “common law” judicial decisions of the state courts. In such matters, federal courts were to decide for themselves what the “law” was, using state court as well as federal court decisions as evidence of the law. Erie reversed course and held that federal courts would have to follow the relevant state-court decisions even if no state statute applied.

Erie was decided in an era when state courts were experimenting with their common laws of tort, property, and contract, in a more progressive direction. For example, many state courts began to move away from contributory negligence that barred a plaintiff from recovering altogether if the plaintiff contributed to the negligence, no matter how insignificant the plaintiff’s own negligence. Other courts began experimenting with strict liability for corporations for certain harms. It was in that context that the Supreme Court held in the following case that federal courts should not displace the common law of a state with the federal courts’ own views about what the common law was or should be.

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Excerpt: Majority Opinion, Justice Louis Brandeis

... Swift v. Tyson held that federal courts exercising jurisdiction on the ground of diversity of citizenship need not, in matters of general jurisprudence, apply the unwritten law of the state as declared by its highest court; that they are free to exercise an independent judgment as to what the common law of the State is—or should be . . . .

The federal courts assumed, in the broad field of ‘general law,’ the power to declare rules of decision which Congress was confessedly without power to enact as statutes. . . .

Experience in applying the doctrine of Swift v. Tyson, had revealed its defects, political and social; and the benefits expected to flow from the rule did not accrue. Persistence of state courts in their own opinions on questions of common law prevented uniformity; and the impossibility of discovering a satisfactory line of demarcation between the province of general law and that of local law developed a new well of uncertainties. . . . It made rights enjoyed under the unwritten ‘general law’ vary according to whether enforcement was sought in the state or in the federal court . . . .

Except in matters governed by the Federal Constitution or by acts of Congress, the law to be applied in any case is the law of the State. And whether the law of the State shall be declared by its Legislature in a statute or by its highest court in a decision is not a matter of federal concern. There is no federal general common law. Congress has no power to declare substantive rules of common law applicable in a State whether they be local in their nature or ‘general,’ be they commercial law or a part of the law of torts. And no clause in the Constitution purports to confer such a power upon the federal courts. . . .

Excerpt: Dissent, Justice Pierce Butler

Swift v. Tyson involved the construction of the Judiciary Act of 1789, § 34: ‘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.’ Expressing the view of all the members of the Court, Mr. Justice Story said ‘In the ordinary use of language, it will hardly be contended, that the decisions of courts constitute laws. They are, at most, only evidence of what the laws are, and are not, of themselves, laws. They are often reexamined, reversed, and qualified by courts themselves, whenever they are found to be either defective, or ill-founded, or otherwise incorrect. The laws of a state are more usually understood to mean the rules and enactments promulgated by the legislative authority thereof, or long-established local customs having the force of laws. . . .

‘It never has been supposed by us, that the section did apply, or was designed to apply, to questions of a more general nature, not at all dependent upon local statutes or local usages of a fixed and permanent operation, as, for example, to the construction of ordinary contracts or other written instruments, and especially to questions of general commercial law, where the state tribunals are called upon to perform the like functions as ourselves, that is, to ascertain, upon general reasoning and legal analogies, what is the true exposition of the contract or instrument, or what is the just rule furnished by the principles of commercial law to govern the case. . . .’

The doctrine of that case has been followed by this Court in an unbroken line of decisions. . . . I am of opinion that . . . under the law, as found by the courts of Pennsylvania and generally throughout the country, it is plain that . . . plaintiff was guilty of negligence that contributed to cause his injuries, and that the judgment below should be reversed upon that ground.

Excerpt: Concurrence, Justice Stanley Reed

. . . . To decide the case now before us and to ‘disapprove’ the doctrine of Swift v. Tyson requires only that we say that the words ‘the laws’ include in their meaning the decisions of the local tribunals. As the majority opinion shows, . . . this Court is now of the view that ‘laws’ includes ‘decisions’ . . . .

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