Erie Railroad Co. v. Tompkins

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Erie Railroad Co. v. Tompkins
Seal of the United States Supreme Court.svg
Supreme Court of the United States
Argued January 31, 1938
Decided April 25, 1938
Full case nameErie Railroad Company v. Harry J. Tompkins*
Citations304 U.S. 64 ( more )
58 S. Ct. 817; 82 L. Ed. 1188; 1938 U.S. LEXIS 984; 11 Ohio Op. 246; 114 A.L.R. 1487
Case history
PriorJudgment for plaintiff, S.D.N.Y.; affirmed, 90 F.2d 603 (2nd. Cir. 1937); cert. granted, 302 U.S. 671(1937).
SubsequentOn remand, reversed, judgment directed for defendant, 98 F.2d 49 (2nd Cir. 1938)
Holding
Under the Rules of Decision Act, federal district courts in diversity jurisdiction cases must apply state law, including the judicial precedents of states' highest courts, 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 E. Hughes
Associate Justices
James C. McReynolds  · Louis Brandeis
Pierce Butler  · Harlan F. Stone
Owen Roberts  · Benjamin N. Cardozo
Hugo Black  · Stanley F. Reed
Case opinions
MajorityBrandeis, joined by Hughes, Stone, Roberts, Black
ConcurrenceReed
DissentButler, joined by McReynolds
Cardozo took no part in the consideration or decision of the case.
Laws applied
U.S. Const. art. III (implied); Judiciary Act of 1789 § 34 (now 28 U.S.C.   § 725); Rules of Decision Act (now 28 U.S.C.   § 1652)
This case overturned a previous ruling or rulings
Swift v. Tyson (1842)

Erie Railroad Co. v. Tompkins, 304 U.S. 64(1938), was a landmark U.S. Supreme Court decision in which the Court held that the United States does not have a general federal common law and that U.S. federal courts must apply state law, not federal law, to lawsuits between parties from different states that do not involve federal questions. In reaching this holding, the Court overturned almost a century of federal civil procedure case law, and established the foundation of the modern law of diversity jurisdiction.

Contents

Although the decision is not widely known among ordinary laypeople, most American lawyers and legal scholars regard Erie as one of the most important decisions in U.S. Supreme Court history. [1] [2] The decision "goes to the heart" of the American system of federalism and the relationship between the U.S. federal government and the states. [1]

Under the traditional view of the United States's system of federalism, each U.S. state is a sovereign polity in all aspects other than those the U.S. Constitution commits to the federal government, which has supremacy over the states in those areas. [3] Consequently, each U.S. state has its own courts and legal system governing areas such as property law, contract law, tort law, commercial law, criminal law, and family law. Due to the United States's historical origins in the British Empire, all U.S. states except Louisiana have inherited or adopted the English common law for their legal systems. [4]

Shortly after the Constitution's ratification, Congress passed the Judiciary Act of 1789, which created the U.S. federal court system underneath the U.S. Supreme Court. The Act gave U.S. federal courts a type of authority known as "diversity jurisdiction" allowing them to hear lawsuits between citizens of different states involving disputes over substantial sums of money, even when no questions of federal law are involved. Section 34 of the Judiciary Act—known as the Rules of Decision Act—provided that federal courts would apply state laws when adjudicating lawsuits between citizens of different states. [5]

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.

— Judiciary Act of 1789, section 34 ("Rules of Decision Act") (28 U.S.C.   § 1652). [lower-alpha 1]

Interpreting this statute's meaning has been among the most difficult legal issues in American federal jurisprudence. [7] The statute provides that U.S. federal courts shall apply state law when hearing cases under diversity jurisdiction. But it does not specify whether the phrase "the laws of the several States" means only statutes passed by a state's legislature, or whether it also includes the common law decisions of a state's supreme court.

The U.S. Supreme Court addressed the question in its 1842 decision Swift v. Tyson . In Swift, the Court ruled that the Rules of Decision Act's phrase "laws of the several States" referred only to each state's statutory laws passed by their legislatures, and did not include each state supreme court's interpretation and construction of the English common law. The Court concluded that this allowed U.S. federal courts to create a general American "federal common law" for federal courts that would cover areas such as commercial law. [8] But applying the Court's holding in Swift proved difficult, and American lawyers, judges, and legal scholars became increasingly opposed to it during the late 19th and early 20th centuries. [9]

Case history

In the early hours of July 27, 1934, a man named Harry Tompkins was walking home along a pathway next to a set of railroad tracks in Hughestown, Pennsylvania. An oncoming train approached and, as it passed, Tompkins was knocked to the ground by an object—apparently an unlatched door—protruding from one of the train cars. Tompkins landed on the track and the train's wheels crushed his right arm. An ambulance took him to a local hospital, where doctors amputated most of his arm. [10] [11]

The train that hit Tompkins had been owned and operated by the Erie Railroad Company, and Tompkins sued the company for negligence. Because Tompkins resided in Pennsylvania and Erie Railroad was incorporated in New York, Tompkins invoked diversity jurisdiction and filed his lawsuit in a U.S. federal court, rather than a Pennsylvania or New York state court. The case was tried in the U.S. District Court for the Southern District of New York, with U.S. district judge Samuel Mandelbaum presiding. [12]

At trial, Erie Railroad's lawyers argued that Pennsylvania law should govern Tompkins's negligence claim. The pathway along which Tompkins had been walking when the train struck him was an Erie Railroad right-of-way. Previous decisions of the Supreme Court of Pennsylvania had held that, under Pennsylvania law, a person walking along a railroad's right-of-way was a trespasser to whom the railroad was not liable for negligence unless its negligence was "wanton" or "wilful". [13] Because Tompkins had not alleged that Erie Railroad had been wantonly or willfully negligent, the railroad's lawyers made a motion to dismiss his claim, citing these Pennsylvania cases. Mandelbaum denied the motion, ruling that under Swift v. Tyson Tompkins's claim was governed by federal common law, not Pennsylvania law. [14] The trial went forward and, in October 1936, the jury found Erie Railroad liable for Tompkins's injuries and awarded him $30,000 in damages. [14]

Erie Railroad appealed the verdict to the U.S. Court of Appeals for the Second Circuit. A panel consisting of U.S. circuit judges Thomas Walter Swan, Martin Thomas Manton, and Learned Hand heard the appeal and ruled in Tompkins's favor, affirming the trial court's verdict. The railroad then appealed to the U.S. Supreme Court, which agreed to hear the case and granted certiorari . [11] [15]

Supreme Court decision

On April 25, 1938, the Supreme Court issued a 6–2 [lower-alpha 2] decision in favor of Erie Railroad that overruled Swift v. Tyson and held that U.S. federal courts must apply state law, not general "federal common law", when adjudicating claims in lawsuits between citizens of different U.S. states.

Opinion of the Court

Justice Louis Brandeis, the author of the majority opinion in Erie Brandeisl.jpg
Justice Louis Brandeis, the author of the majority opinion in Erie

For the purposes of the decision's core holding, six justices formed the majority and joined an opinion written by justice Louis Brandeis. [lower-alpha 3]

The Court began by framing the case around the question of "whether the oft-challenged doctrine of Swift v. Tyson shall now be disapproved." [16] In the opinion's first section, the Court reviewed the history of the Swift doctrine. The Court referenced the research of American legal scholar Charles Warren, who in a 1923 Harvard Law Review article had published evidence of an earlier draft of the Rules of Decision Act that explicitly included states' common laws in its definition of "the laws of the several states". The Court concluded that Warren's discovery proved that the Swift Court's interpretation of the Act had been "erroneous". [17]

In the opinion's second section, the Court explained that the Swift doctrine had not produced the legal uniformity the Court had hoped it would, but had instead allowed litigants from other states to discriminate against other litigants in their home states. [18] The Court said that because the Swift doctrine dictated that a lawsuit between two in-state parties would be decided under state law while an identical lawsuit between an in-state party and an out-of-state party would be decided under federal common law, the Swift doctrine was allowing plaintiffs to manipulate which law would be applied to their lawsuits by strategically filing them in specific state or federal courts—a practice now known as "forum shopping". [19] The Court decried this practice, saying that it allowed plaintiffs to introduce "grave discrimination" against parties from other states. [20]

Furthermore, the Court held that the Swift doctrine had not only been a "social and political" failure, but had also been unconstitutional—though the opinion did not explain how. [18] [21] [lower-alpha 4]

If only a question of statutory construction were involved, we should not be prepared to abandon a doctrine so widely applied throughout nearly a century. But the unconstitutionality of the course pursued has now been made clear, and compels us to do so.

— Erie, 304 U.S. at 77–78. [22]

Having determined that the Swift doctrine was unconstitutional, the opinion's third section declared that there is no general U.S. federal common law, and that U.S. federal courts hearing cases under diversity-of-citizenship jurisdiction must apply state laws as construed by state supreme courts.

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.

— Erie, 304 U.S. at 78. [23]

The Court emphasized that its ruling was not meant to strike down any federal laws, but was only intended to "declare that in applying the [Swift] doctrine this Court and the lower courts have invaded rights which in our opinion are reserved by the Constitution to the several States." [24]

Applying its holding to the facts of Tompkins's case, the Court held that both the district court and the Second Circuit had erred by not applying Pennsylvania law to Tompkins's claim against Erie Railroad. The Court reversed the Second Circuit's decision and remanded the case, instructing the court to determine whether the railroad company's interpretation of Pennsylvania law had been correct. [18]

Reed's concurrence in the judgment

Justice Stanley F. Reed concurred only in the judgment. Reed agreed with the Court's core holding that Swift v. Tyson should be overruled and that federal courts should apply state law when deciding cases under diversity jurisdiction. But Reed disagreed with the Court's conclusion that the Swift doctrine had been unconstitutional, saying instead that he thought it had been merely an erroneous interpretation of the Rules of Decision Act.

Butler's dissent

Justice Pierce Butler filed a dissenting opinion, joined by Justice James McReynolds, [25] in which he argued the majority had engaged in judicial activism. He asserted 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.

Aftermath

On remand, the three Second Circuit judges determined that Erie Railroad's characterization of Pennsylvania law—that a person walking along a railroad right of way was a trespasser to whom the railroad was not liable for negligence unless the negligence was "wanton" or "wilful"—had been correct. [26] The judges concluded that Tompkins had neither alleged nor shown any evidence that Erie Railroad's negligence had been "wanton", and they therefore held that Erie Railroad was entitled to a directed verdict. [26] This forced the district court to enter a new judgment in favor of Erie Railroad. Tompkins lost his $30,000 damages award and received nothing. [26]

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.

Erie Railroad is considered one of the major examples where the Supreme Court has exceptionally gone against the principle of party presentation, as neither party had suggested a need to review Swift but the Court took it up themselves to review and ultimately overturn it. [27]

See also

Related Research Articles

<span class="mw-page-title-main">Common law</span> Law created by judicial precedent

In law, common law is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions.

Precedent or stare decisis is a principle or rule established in a previous legal case relevant to a court or other tribunal when deciding subsequent cases with similar issues or facts. Common-law legal systems often view precedent as binding or persuasive, while civil law systems do not. Common-law systems aim for similar facts to yield similar and predictable outcomes, and observing precedent when making decisions is the mechanism to achieve that goal. Common-law precedent is a third kind of law, on equal footing with statutory law and subordinate legislation in UK parlance – or regulatory law. The principle by which judges are bound to precedents is known as stare decisis.

<span class="mw-page-title-main">Diversity jurisdiction</span> U.S. court jurisdiction over persons of different states or nationalities

In the law of the United States, diversity jurisdiction is a form of subject-matter jurisdiction that gives United States federal courts the power to hear lawsuits that do not involve a federal question. For a federal court to have diversity jurisdiction over a lawsuit, two conditions must be met. First, there must be "diversity of citizenship" between the parties, meaning the plaintiffs must be citizens of different U.S. states than the defendants. Second, the lawsuit's "amount in controversy" must be more than $75,000. If a lawsuit does not meet these two conditions, federal courts will normally lack the jurisdiction to hear it unless it involves a federal question, and the lawsuit would need to be heard in state court instead.

The federal judiciary of the United States is one of the three branches of the federal government of the United States organized under the United States Constitution and laws of the federal government. The U.S. federal judiciary consists primarily of the U.S. Supreme Court, the U.S. Courts of Appeals, and the U.S. District Courts. It also includes a variety of other lesser federal tribunals.

Federal common law is a term of United States law used to describe common law that is developed by the federal courts, instead of by the courts of the various states. The United States is the only country to combine the creation of common law doctrines with a complete federalism, wherein the national supreme court has virtually no power to review state court decisions to determine whether the state courts have followed state laws, unless a federal question is involved and there was a lack of opportunity to bring the claim in the state courts. The High Court of Australia is sometimes said to have federal common law, but because all state and territorial courts are directly appealable to the High Court, this is indistinguishable from a general common law. In contrast, the United States Supreme Court has effectively barred the creation of federal common law in areas traditionally under the authority of state courts. Nevertheless, there are several areas where federal common law continues to govern.

<i>Erie</i> doctrine Doctrine in US federal civil procedure

The Erie doctrine is a fundamental legal doctrine of civil procedure in the United States which mandates that a federal court called upon to resolve a dispute not directly implicating a federal question must apply state substantive law.

Swift v. Tyson, 41 U.S. 1 (1842), was a case brought in diversity in the Circuit Court for the Southern District of New York on a bill of exchange accepted in New York in which the Supreme Court of the United States determined that United States federal courts that heard cases brought under their diversity jurisdiction under the Judiciary Act of 1789 must apply statutory state laws when the state legislatures in question had spoken on the issue, but did not have to apply the state's common law if the state legislatures had not spoken on the issue.

<i>Sampson v. Channell</i>

Sampson v. Channell, 110 F.2d 754, was a United States Court of Appeals decision interpreting the application of the Erie doctrine where diversity jurisdiction is invoked in a choice of law situation, where a court in one state may be called upon to apply the laws of another state.

Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398 (1964), was a United States Supreme Court case that determined that the policy of United States federal courts would be to honor the Act of State Doctrine, which dictates that the propriety of decisions of other countries relating to their internal affairs would not be questioned in the courts of the United States.

The Rules of Decision Act mandates the application of substantive state law in cases heard in U.S. federal courts sitting in diversity, except where state law is preempted by federal law. The U.S. Supreme Court in Swift v. Tyson (1842) originally read this Act of Congress as limited to state statutory law, but later overturned Swift in Erie Railroad Co. v. Tompkins (1938) and instead held that the Rules of Decision Act requires the application of state law including case law originating from state courts.

Clearfield Trust Co. v. United States, 318 U.S. 363 (1943), was a case in which the Supreme Court of the United States held that federal negotiable instruments were governed by federal law, and thus the federal court had the authority to fashion a common law rule.

Hanna v. Plumer, 380 U.S. 460 (1965), was a decision by the Supreme Court of the United States, in which the Court further refined the Erie doctrine regarding when and by what means federal courts are obliged to apply state law in cases brought under diversity jurisdiction. The question in the instant case was whether Federal Rules of Civil Procedure governing service of process should yield to state rules governing the service of process in diversity cases. The Court ruled that under the facts of this case, federal courts shall apply the federal rule. The decision was drafted by John Hart Ely, who was then a law clerk for Earl Warren.

Black and White Taxicab and Transfer Company v. Brown and Yellow Taxicab and Transfer Company, 276 U.S. 518 (1928), was a United States Supreme Court case in which the Court refused to hold that federal courts sitting in diversity jurisdiction must apply state common law. Ten years later, in Erie Railroad Co. v. Tompkins, the Court reversed course, and overturned Swift v. Tyson.

Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996), held that federal jurisdiction predicated on diversity of citizenship can be sustained even if there did not exist complete diversity at the time of removal to federal court, so long as complete diversity exists at the time the district court enters judgment.

Admiralty law in the United States is a matter of federal law.

<span class="mw-page-title-main">Certified question</span>

In the law of the United States, a certified question is a formal request by one court from another court, usually but not always in another jurisdiction, for an opinion on a question of law.

Klaxon Company v. Stentor Electric Manufacturing Company, 313 U.S. 487 (1941), was a United States Supreme Court case in which the Court applied the choice-of-law principles of Erie Railroad v. Tompkins to conflicts between laws of different states for cases sitting in federal court on diversity jurisdiction. The court held that a federal court sitting in diversity must apply the choice-of-law doctrine of the forum state to choose between the forum state's law and the other state's law.

Dice v. Akron, Canton & Youngstown R. Co., 342 U.S. 359 (1952), was a United States Supreme Court case in which the Court held that federal court rules apply when an action is brought pursuant to a federal right and where the substance of a state's rules would necessarily have an adverse effect on the protection of an individual's rights under federal law.

References

Footnotes

  1. ↑ The statute originally read "shall be regarded as rules of decision in trials at common law ...." Congress changed the phrase "trials at common law" to "civil actions" in 1948. [6]
  2. ↑ Due to poor health, justice Benjamin Cardozo did not sit for oral argument or participate in the Court's decision.
  3. ↑ Justice Stanley F. Reed concurred in the Court's core holdings that Swift v. Tyson should be overruled and that federal courts adjudicating state-law claims under diversity jurisdiction must apply state law rather than "general" federal common law, although he did not join the Court's holding that the Swift doctrine was unconstitutional.
  4. ↑ Justice Stanley F. Reed did not join the Court's conclusion that Swift v. Tyson had been unconstitutional, making the Court's holding on that point 5–3, not 6–2.

Citations

  1. 1 2 Wright & Kane (2017), § 55, p. 340.
  2. ↑ Young (2013), p. 18.
  3. ↑ Zeigler (1964), pp. 469–71.
  4. ↑ Hall (1951), p. 815.
  5. ↑ An Act to Establish the Judicial Courts of the United States, ch. 20, § 34, 1 Stat. 73, 92 (1789).
  6. ↑ Wright & Kane (2017), § 54, p. 333, note 2.
  7. ↑ Wright & Kane (2017), § 54, p. 333.
  8. ↑ Wright & Kane (2017), § 54, pp. 333–34.
  9. ↑ Wright & Kane (2017), § 54, p. 334–36.
  10. ↑ Younger (1978), pp. 1012–13.
  11. 1 2 Wright & Kane (2017), § 55, p. 338.
  12. ↑ Younger (1978), pp. 1017–18.
  13. ↑ Younger (1978), pp. 1020–21, 1031.
  14. 1 2 Younger (1978), p. 1021.
  15. ↑ Younger (1978), pp. 1013–14, 1016–24.
  16. ↑ Wright & Kane (2017) , § 55, p. 338, quoting Erie, 304 U.S. at 69.
  17. ↑ Wright & Kane (2017) , § 55, pp. 338–39, quoting Erie, 304 U.S. at 72.
  18. 1 2 3 Wright & Kane (2017), § 55, p. 339.
  19. ↑ Chemerinsky (2021), § 5.3, p. 363.
  20. ↑ Chemerinsky (2021) , § 5.3, p. 363, quoting Erie, 304 U.S. at 74.
  21. ↑ Clark (2007), pp. 1295–96.
  22. ↑ Quoted in Wright & Kane (2017), § 55, p. 339.
  23. ↑ Quoted in Wright & Kane (2017), § 55, p. 339.
  24. ↑ Wright & Kane (2017) , § 55, p. 339, quoting Erie, 304 U.S. at 79–80.
  25. ↑ Younger (1978), p. 1028.
  26. 1 2 3 Younger (1978), pp. 1028–29.
  27. ↑ Frost, Amanda (2009). "The Limits of Advocacy". Duke Law Journal. 59 (3): 447–518.

Works cited

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