Supreme Court of California Search Home > Opinions > Boeken v. Philip Morris CITATION 48 CAL. 4TH 788, 230 P.3D 342, 108 CAL. RPTR. 3D 806 Boeken v. Philip Morris SUMMARYOPINIONDOCKETBRIEFSANNOTATIONMEDIA Petition for review after the Court of Appeal affirmed the judgment in a civil action. This case presents the following issue: Did the doctrine of res judicata bar plaintiff's claim for noneconomic damages in a wrongful death action after her husband died, because she had dismissed with prejudice a claim for loss of consortium while he was alive?

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CITATION 48 CAL. 4TH 788, 230 P.3D 342, 108 CAL. RPTR. 3D 806

Boeken v. Philip Morris

• SUMMARY
• OPINION
• DOCKET
• BRIEFS
• ANNOTATION
• MEDIA

Petition for review after the Court of Appeal affirmed the judgment in a civil action. This case presents the following issue: Did the doctrine of res judicata bar plaintiff's claim for noneconomic damages in a wrongful death action after her husband died, because she had dismissed with prejudice a claim for loss of consortium while he was alive?

Civil Procedure Outline - Erie Doctrine **Abridged Erie** In diversity cases in federal court, the court must apply federal procedural law but state substantive law, including state-created common law…mostly. (Erie and RDA) Analysis tracks… State law vs. federal statute (authority from Supremacy Clause)/FRCP (authority from REA 2072)… Is the statute/FRCP is sufficiently broad to control the issue before the court? Does it "occupy the field"? Is it "sufficiently broad to control the issue before the court"? (Walker, Stewart) If so, does the statute/FRCP represent a valid exercise of Congress' authority under the Constitution? (Hanna) For FRCPs, is it "arguably procedural" and will using not "abridge, enlarge, or modify a substantive right"? (REA, used in Sibbach) If passes all of these questions, statute/FRCP controls. State law vs. federal procedural common law (laches, "shocks the conscience")(authority from RDA 1652)… Is the judge-made federal rule broad enough to cover the circumstances? (rules are often interpreted narrowly to avoid conflict, Gasperini, Walker) No. Follow state rule. Yes. Is the federal rule at least arguably procedural (and fall in line with federal statutes and rules)? No. Follow state rule. Yes. Would following the federal rule be outcome-determinative AND encourage forum-shopping? (refined outcome-determinative test, "twin aims of Erie", from Hanna) Yes. Would federal policy trump the application of state law under Byrd balancing ("countervailing factors", Byrd)? Yes. Apply judge-made federal rule. No. Apply state rule. No. Apply judge-made federal rule. **Full Erie** Pre-Erie The Rules of Decision Act If a federal statute, constitutional provision, or treaty applies, it will provide the governing law. Otherwise, federal courts should apply relevant state law. Swift v. Tyson The RDA refers only to state statutes, not to the common law decisions of state courts. In cases where no federal statute or state statute applies, courts do not have to rely on state common law decisions; they can look to the common law of any state or even treatises for authority. Problems Federal courts in diversity cases could reach their own decisions about the proper rule in common law cases, even if those conclusions contradicted the governing case law of the state in which they sat. An out-of-state party to a state action has a distinct advantage. If out-of-state law favored the out-of-state party, they could sue in that state court. The in-state defendant can't remove in diversity cases (1441(b)), so they are stuck in that state court. If federal courts applied a more favorable rule, the out-of-state party could sue in federal court. There is no right to remove from federal to state court. Thus, the out-of-state party has a choice of different rules since it has a choice of two different court systems. Erie Holding SCOTUS held that Swift's interpretation of the RDA led to an unconstitutional assumption of power by the federal courts since they were making state law through these diversity cases. The RDA must be interpreted to require federal courts to apply not only the state statutes, but also the common law of the state in a diversity case. In federal question cases, if a state claim is brought in through supplemental jurisdiction, the federal court must still apply state law to that claim even though federal law will apply to the federal claim. Early issues How should a federal court apply state law if there are conflicting state court decisions about the issue at hand? SCOTUS ruled that district courts should use the "supreme court predictive" approach; federal judges should try to predict what the high state court would say. A federal judge should very rarely make the prediction that a state supreme court case would be overruled. How should a federal court proceed if there is no precedent at all on the issue? In the same vein, the court should try to predict what state appellate courts would say. As an aside, if the issue were to come up after the diversity ruling, the state court is not bound to follow the federal judge's decision; the state court may take it into account in his decision, but he is not bound to follow it. Which state's law should a federal court use in diversity cases? Every state has choice-of-law rules to deal with this problem. From Klaxon, federal diversity courts should use the choice-of-law rules of the state in which it sits. Thus, a NY federal court should apply whatever state substantive law the New York state court would apply to the case. This reasoning was based on the fact that Erie mandated that the case should come out the same way in federal court as it would in the state court of the state where the federal court sat. This could create forum-shopping since a party could choose the federal court in a state with a choice-of-law provision that would benefit them. The Klaxon court recognized this risk but shrugged it off as inevitable. Post Erie Changes Guaranty Trust Co. v. York Outcome-determinative test The choice of state or federal court in a diversity case should not affect the outcome of the case. Thus, if federal practice differs from state practice, the court should determine whether the case would come out differently if it applied its own rule. If it would, a federal diversity court should use the state rule instead. Problems with York York mandated deference to state law even in areas where there was constitutional authority to make a separate federal rule. Article III, Section 2 of the Constitution, together with the Necessary and Proper Clause, provide constitutional authority for federal courts to apply their own rules on matters of procedure, like the method of service of process. York, however, required deference to state law even in matters of litigation procedure under the outcome-determinative test. Where the federal court could, constitutionally, apply its own rule, and is making a discretionary policy decision whether to apply state law to ensure uniform outcomes, the court may balance that uniformity policy against other policies. Byrd v. Blue Ridge Other policies might outweigh the uniformity policy posited by Erie and York. In cases leading up to Byrd, diversity courts had applied state rules even in matters having to do with procedure in conducting the litigation under the outcome-determinative test, but they have constitutional authority to follow a separate federal practice. The York policy of uniform outcomes must be considered along with other policies, which might sometimes outweigh the uniformity policy. For example, the division of functions between judge and jury in federal cases, under the influence of the 7th Amendment, was an important consideration supporting the use of federal procedure in federal court in diversity cases. Since the state law was not "bound up with rights and obligations of the parties" (in which case the federal could would have to defer to it), the Court could consider "affirmative countervailing considerations." Byrd did not overrule York, it merely said that balancing was necessary in matters relating to procedure. Only if important federal policies would be compromised by following state rules might the federal court choose to follow a federal procedural rule in the face of a contrary state rule. Hanna v. Plumer Court recognized two different tracks. Conflicts between state law and federal judicial practices (not a federal statute or a Federal Rule) York dealt with judicial practice of applying laches; Byrd dealt with the judicial practice of having the jury decide all factual issues. There was no Federal Rule involved. Of course, in pure substantive matters or those bound up in substantive rights, state law must apply. For grey areas, Hanna prescribed a more focused version of the York outcome-determinative test to decide between state law and federal judicial practices which are not a part of the FRCP. The court should consider whether applying the federal approach rather than the state rule would lead to (1) forum shopping and (2) "inequitable administration of the laws" (significantly different litigation opportunities for diversity litigants than for those who must proceed in state court). The Court said that the question of equitable administration should be viewed prospectively. In other words, would the litigant before filing suit have greater litigation opportunities in federal court if that court followed its own practice instead of state law? In the instant case, the Court said that if the service rule in question were a judicial practice and not a part of the FRCP, state law would not have to be used since the federal approach would only require the P to serve process in a slightly different manner, a difference too slight to affect her choice of forum or provide unfair advantages to diverse Ps over non-diverse Ps. This analysis was dicta, however, because the issue in Hanna dealt directly with a FRCP Rule. Conflicts between state law and the Federal Rules of Civil Procedure The Federal Rules were adopted by SCOTUS, under authority delegated to it by Congress in the Rules Enabling Act (28 USC 2072). The REA requires that the Rules created by the Court be "arguably procedural" and not "abridge, enlarge, or modify any substantive right." For conflicts involving a Federal Rule, the question is whether the Court had the power to adopt the Rule. It must be broadly procedural (under Sibbach) and must not alter substantive rights. If it meets this two-part test, the Rule is valid and will apply, even if it leads to a different outcome from what the P would obtain in state court. So, if the conflict involves a federal judicial practice, the "modified outcome determinative test" of Hanna I applies, If it involves a conflict between state law and a FRCP Rule, the question under Hanna II is whether the Court had the power to write the rule (i.e. procedural and not alter substantive rights). Clarifications on Hanna (requirement of "direct conflicts" with FRCP Rules) Walker v. Armco Steel Corp. State practice provided that the P must file suit within the limitations period and serve process in the action on the D within 60 days to avoid being barred. Under FRCP Rule 3, an action is "commenced by filing a complaint with the court." If Rule 3 provides that filing the complaint satisfies the limitations period, an action might be barred under state law but timely under the Federal Rule. The Court avoided this problem by holding that FRCP Rule 3 did not directly address the issue of meeting the limitations period and does not affect state statutes of limitations. Thus, since there was no "direct collision" between the state rule and FRCP Rule 3, Hanna I analysis through the "modified outcome-determinative test" applies. It seems likely that if there is a logical limiting construction that avoids a direct conflict, the court will lean towards that construction (and Hanna I analysis). Gasperini v. Center for Humanities SCOTUS held that the standard used for judges to review damages created a conflict between state procedural law ("materially deviates" from reasonable compensation) and federal common procedural law ("shocks the conscience"), does not fall under Rule 59; thus, track 3 analysis is necessary. Track three analysis -- Is the judge-made rule broad enough to cover the circumstances? No. Follow state rule. Yes. Is it at least arguably procedural (and fall in line with federal statutes and rules)? No. Follow state rule. Yes. Would following the rule be outcome-determinative AND encourage forum-shopping? Yes. Would federal policy trump the application of state law under Byrd balancing? Yes. Apply judge-made rule. No. Apply state rule. No. Apply judge made rule. Court found that following the federal common procedural would be outcome-determinative and encourage forum shopping (Hanna). Since federal policy would not trump the application of state law (Byrd), the state standard was used.

Civil Procedure Outline - Erie Doctrine

**Abridged Erie**

1. In diversity cases in federal court, the court must apply federal procedural law but state substantive law, including state-created common law…mostly. (Erie and RDA) Analysis tracks…
• State law vs. federal statute (authority from Supremacy Clause)/FRCP (authority from REA 2072)…
• Is the statute/FRCP is sufficiently broad to control the issue before the court? Does it "occupy the field"? Is it "sufficiently broad to control the issue before the court"? (Walker, Stewart)
• If so, does the statute/FRCP represent a valid exercise of Congress' authority under the Constitution? (Hanna)
• For FRCPs, is it "arguably procedural" and will using not "abridge, enlarge, or modify a substantive right"? (REA, used in Sibbach)
• If passes all of these questions, statute/FRCP controls.
   
• State law vs. federal procedural common law (laches, "shocks the conscience")(authority from RDA 1652)…
• Is the judge-made federal rule broad enough to cover the circumstances? (rules are often interpreted narrowly to avoid conflict, Gasperini, Walker)
• No. Follow state rule.
• Yes. Is the federal rule at least arguably procedural (and fall in line with federal statutes and rules)?
• No. Follow state rule.
• Yes. Would following the federal rule be outcome-determinative AND encourage forum-shopping? (refined outcome-determinative test, "twin aims of Erie", from Hanna)
• Yes. Would federal policy trump the application of state law under Byrd balancing ("countervailing factors", Byrd)?
• Yes. Apply judge-made federal rule.
• No. Apply state rule.
• No. Apply judge-made federal rule.

**Full Erie**

1. Pre-Erie
1. The Rules of Decision Act
1. If a federal statute, constitutional provision, or treaty applies, it will provide the governing law.
2. Otherwise, federal courts should apply relevant state law.
2. Swift v. Tyson
1. The RDA refers only to state statutes, not to the common law decisions of state courts.
2. In cases where no federal statute or state statute applies, courts do not have to rely on state common law decisions; they can look to the common law of any state or even treatises for authority.
3. Problems
1. Federal courts in diversity cases could reach their own decisions about the proper rule in common law cases, even if those conclusions contradicted the governing case law of the state in which they sat.
2. An out-of-state party to a state action has a distinct advantage.
1. If out-of-state law favored the out-of-state party, they could sue in that state court. The in-state defendant can't remove in diversity cases (1441(b)), so they are stuck in that state court.
2. If federal courts applied a more favorable rule, the out-of-state party could sue in federal court. There is no right to remove from federal to state court.
• Thus, the out-of-state party has a choice of different rules since it has a choice of two different court systems.


2. Erie
1. Holding
1. SCOTUS held that Swift's interpretation of the RDA led to an unconstitutional assumption of power by the federal courts since they were making state law through these diversity cases.
2. The RDA must be interpreted to require federal courts to apply not only the state statutes, but also the common law of the state in a diversity case.
3. In federal question cases, if a state claim is brought in through supplemental jurisdiction, the federal court must still apply state law to that claim even though federal law will apply to the federal claim.
2. Early issues
1. How should a federal court apply state law if there are conflicting state court decisions about the issue at hand?
• SCOTUS ruled that district courts should use the "supreme court predictive" approach; federal judges should try to predict what the high state court would say.
• A federal judge should very rarely make the prediction that a state supreme court case would  be overruled.
2. How should a federal court proceed if there is no precedent at all on the issue?
• In the same vein, the court should try to predict what state appellate courts would say.
• As an aside, if the issue were to come up after the diversity ruling, the state court is not bound to follow the federal judge's decision; the state court may take it into account in his decision, but he is not bound to follow it.
3. Which state's law should a federal court use in diversity cases?
• Every state has choice-of-law rules to deal with this problem. From Klaxon, federal diversity courts should use the choice-of-law rules of the state in which it sits.
• Thus, a NY federal court should apply whatever state substantive law the New York state court would apply to the case.
• This reasoning was based on the fact that Erie mandated that the case should come out the same way in federal court as it would in the state court of the state where the federal court sat.
• This could create forum-shopping since a party could choose the federal court in a state with a choice-of-law provision that would benefit them. The Klaxon court recognized this risk but shrugged it off as inevitable.


3. Post Erie Changes
1. Guaranty Trust Co. v. York
1. Outcome-determinative test
• The choice of state or federal court in a diversity case should not affect the outcome of the case.
• Thus, if federal practice differs from state practice, the court should determine whether the case would come out differently if it applied its own rule. If it would, a federal diversity court should use the state rule instead.
2. Problems with York
• York mandated deference to state law even in areas where there was constitutional authority to make a separate federal rule.
• Article III, Section 2 of the Constitution, together with the Necessary and Proper Clause, provide constitutional authority for federal courts to apply their own rules on matters of procedure, like the method of service of process. York, however, required deference to state law even in matters of litigation procedure under the outcome-determinative test.
• Where the federal court could, constitutionally, apply its own rule, and is making a discretionary policy decision whether to apply state law to ensure uniform outcomes, the court may balance that uniformity policy against other policies.
2. Byrd v. Blue Ridge
1. Other policies might outweigh the uniformity policy posited by Erie and York.
• In cases leading up to Byrd, diversity courts had applied state rules even in matters having to do with procedure in conducting the litigation under the outcome-determinative test, but they have constitutional authority to follow a separate federal practice.
• The York policy of uniform outcomes must be considered along with other policies, which might sometimes outweigh the uniformity policy.
• For example, the division of functions between judge and jury in federal cases, under the influence of the 7th Amendment, was an important consideration supporting the use of federal procedure in federal court in diversity cases.
• Since the state law was not "bound up with rights and obligations of the parties" (in which case the federal could would have to defer to it), the Court could consider "affirmative countervailing considerations."
2. Byrd did not overrule York, it merely said that balancing was necessary in matters relating to procedure.
• Only if important federal policies would be compromised by following state rules might the federal court choose to follow a federal procedural rule in the face of a contrary state rule.
3. Hanna v. Plumer
1. Court recognized two different tracks.
1. Conflicts between state law and federal judicial practices (not a federal statute or a Federal Rule)
• York dealt with judicial practice of applying laches; Byrd dealt with the judicial practice of having the jury decide all factual issues. There was no Federal Rule involved.
• Of course, in pure substantive matters or those bound up in substantive rights, state law must apply.
• For grey areas, Hanna prescribed a more focused version of the York outcome-determinative test to decide between state law and federal judicial practices which are not a part of the FRCP.
• The court should consider whether applying the federal approach rather than the state rule would lead to (1) forum shopping and (2) "inequitable administration of the laws" (significantly different litigation opportunities for diversity litigants than for those who must proceed in state court).
• The Court said that the question of equitable administration should be viewed prospectively. In other words, would the litigant before filing suit have greater litigation opportunities in federal court if that court followed its own practice instead of state law?
• In the instant case, the Court said that if the service rule in question were a judicial practice and not a part of the FRCP, state law would not have to be used since the federal approach would only require the P to serve process in a slightly different manner, a difference too slight to affect her choice of forum or provide unfair advantages to diverse Ps over non-diverse Ps.
• This analysis was dicta, however, because the issue in Hanna dealt directly with a FRCP Rule.


2. Conflicts between state law and the Federal Rules of Civil Procedure
• The Federal Rules were adopted by SCOTUS, under authority delegated to it by Congress in the Rules Enabling Act (28 USC 2072).
• The REA requires that the Rules created by the Court be "arguably procedural" and not "abridge, enlarge, or modify any substantive right."
• For conflicts involving a Federal Rule, the question is whether the Court had the power to adopt the Rule. It must be broadly procedural (under Sibbach) and must not alter substantive rights.
• If it meets this two-part test, the Rule is valid and will apply, even if it leads to a different outcome from what the P would obtain in state court.
2. So, if the conflict involves a federal judicial practice, the "modified outcome determinative test" of Hanna I applies, If it involves a conflict between state law and a FRCP Rule, the question under Hanna II is whether the Court had the power to write the rule (i.e. procedural and not alter substantive rights).
4. Clarifications on Hanna (requirement of "direct conflicts" with FRCP Rules)
1. Walker v. Armco Steel Corp.
• State practice provided that the P must file suit within the limitations period and serve process in the action on the D within 60 days to avoid being barred. Under FRCP Rule 3, an action is "commenced by filing a complaint with the court."
• If Rule 3 provides that filing the complaint satisfies the limitations period, an action might be barred under state law but timely under the Federal Rule.
• The Court avoided this problem by holding that FRCP Rule 3 did not directly address the issue of meeting the limitations period and does not affect state statutes of limitations.
• Thus, since there was no "direct collision" between the state rule and FRCP Rule 3, Hanna I analysis through the "modified outcome-determinative test" applies.
• It seems likely that if there is a logical limiting construction that avoids a direct conflict, the court will lean towards that construction (and Hanna I analysis).


5. Gasperini v. Center for Humanities
1. SCOTUS held that the standard used for judges to review damages created a conflict between state procedural law ("materially deviates" from reasonable compensation) and federal common procedural law  ("shocks the conscience"), does not fall under Rule 59; thus, track 3 analysis is necessary.
• Track three analysis --
• Is the judge-made rule broad enough to cover the circumstances?
• No. Follow state rule.
• Yes. Is it at least arguably procedural (and fall in line with federal statutes and rules)?
• No. Follow state rule.
• Yes. Would following the rule be outcome-determinative AND encourage forum-shopping?
• Yes. Would federal policy trump the application of state law under Byrd balancing?
• Yes. Apply judge-made rule.
• No. Apply state rule.
• No. Apply judge made rule.
2. Court found that following the federal common procedural would be outcome-determinative and encourage forum shopping (Hanna). Since federal policy would not trump the application of state law (Byrd), the state standard was used.

| Home | Contracts I Outline | Torts Outline | Civil Procedure I Outline The Erie Doctrine Law School Help Back: Personal Jurisdiction The Erie Doctrine – A federal court, when exercising diversity jurisdiction (or supplemental jurisdiction), must apply the substantive law of the state in which it is sitting. However, federal courts will apply federal procedural law in these diversity cases. A state law claim sitting in federal court. I. Swift v Tyson (1842) - held that federal courts were free to apply the law so as to reach a result they thought was justice regardless of state common law. Overturned by Erie. II. Erie Railroad v. Tompkins (1938) A. Plaintiff walking alongside RR tracks when his right arm was severed by an object protruding from defendant's train; this happened in PA. Plaintiff filed a lawsuit in NY Fed. Court, b/c more favorable for plaintiff. The issue was what level of duty is owed to a trespasser. If PA law applied then only "wanton negligence" created liability, & no recovery. If "federal common law" applied the plaintiff could recover if the railroad was guilty of "ordinary" negligence. B. Erie held that federal courts in diversity actions apply the substantive law of the state in which they sit. In diversity actions federal courts must treat the decisions of the state courts in the jurisdiction in which they sit as a source of law. I.e., a federal court in a diversity case must apply the same law that the state court would apply. There is no longer a "federal common law," a federal court must apply the common law of the state. The rule of Erie serves the purposes of discouraging forum shopping and avoiding the unfair administration of laws (i.e., avoiding the potential for state and federal courts sitting in the same state reaching different outcomes based on the same facts.) III. If there is a federal law (statute, Federal Rule of Civ Pro, etc.) on point, then federal law will apply, provided that it is valid. A. Ex. Federal Rule 4 permits substituted service of process. Suppose that state law (of the state in which the federal court sits) does not permit substituted service. The court will apply the Federal Rule, because it is on point and is valid. A Federal Rule of Civil Procedure is valid if it is “arguably procedural.” i. Hanna v. Plumer (1965) – Hanna, from Ohio, sued the estate of Osgood, from Massachusetts, over a car accident in South Carolina. Hanna served process by leaving documents with the wife of the executor, which complied with the FRCP, but not Massachusetts law. The issue was whether a civil action brought in federal court based on diversity jurisdiction, shall service of process be based on the FRCP or on state law. 1. Erie had established that substantive issues (when it’s the elements of a claim or defense at issue) would use the state law. 2. In Hanna, the law was procedural, not substantive (service of process). 3. Supremacy Clause - if federal law is on point, then it trumps state law, as long as it is valid. FRCP is very likely to be valid.. a. Rules Enabling Act establishes that FRCP good i. Rules Enabling Act prevents litigants from challenging the validity of constitutional Federal Rules via the Erie Doctrine, but the rules shall not infringe on substantive right 4. So, ok to use federal law on the service of process issue in Hanna. IV. If there is no Federal Directive on point, a federal judge can still choose to ignore state law, but it depends if the issue is substantive or procedural A. Substantive – then must follow state law (Erie Problem) B. Procedural – here is where it becomes a problem. Courts had never really defined this, but has given three ways to approach the problem i. Outcome-Determinative Test - holds that an issue is substantive if it substantially affects the outcome of the case 1. Guaranty Trust Co. v. York (1945) – In Guaranty Trust the issue was whether a federal court in a diversity case must apply the state statute of limitations (procedural), which would have barred the suit in state court. Court used the "outcome determinative test." A state law which is normally regarded as "procedural" should be applied by a federal court in a diversity case if it would, or could, vitally affect the outcome of the case. a. Guaranty Trust redefined the Erie doctrine. The intent of Erie was to insure that where a federal court is exercising jurisdiction solely because of diversity, the outcome of the litigation in federal court should be substantially the same as it would be if tried in State court. Goal is to avoid reaching a different result in federal court than would otherwise be had in state court. If applying federal law would mean a different outcome, state law controls therefore state statute of limitations applies. ii. Balance of Interests Test – the court weighs whether the state or federal judicial system has the greater interest in having its rule applied. 1. Byrd v. Blue Ridge Electric Cooperative, Inc. (1958) – Byrd brought a tort claim against Blue Ridge. Byrd working as independent contractor, but Blue Ridge says for purposes of the worker’s compensation act he was an employee, b/c he was doing same work as an employee. Issue is who determines if plaintiff falls under workman’s comp? In SC it would the judge. Under federal law, it was a matter for the jury. This is a procedural issue. a. Under the outcome-determinative test, the court would have to use state law. However, court found that the possibility of a different outcome was less important than the right to a jury trial (7th amendment). Therefore, court doesn’t want to use the outcome-determinative test, and establishes the balance of interests test instead. The federal interest outweighs any state interest, so plaintiff should get a jury trial. b. But problem with Byrd - never really been told how to apply it. iii. Forum Shopping Deterrence test – the federal judge should follow state law on the issue if failing to do so would cause litigants to flock to federal court. 1. Hanna v. Plumer (1965) – a. Under the outcome-determinative test the defendant would win i. Court here says that the outcome-determinative test from Guaranty is not absolute because there were more basic principles of Erie. 1. The Twin aims of Erie were to avoid Forum shopping and the unfair differences in administration of justice between state and federal courts. ii. Court says that while the outcome of the current case is determined by which law is applied, the rights in question are not substantial enough to create problems of unequal protection. 1. The Court says that the competing rules, though outcome-determinative, have little or no relevance to the choice of a forum. You wouldn’t decide to file in state versus federal court based solely on the choice between these two laws. 2. In the current case the federal and state laws are in direct conflict. The court has been instructed to follow the Federal Rule in these cases and there is no constitutional reason not to do so. iii. In short, outcome determinative judgments are important for deciding if a state or federal rule applies but in the current case denying the federal rule would remove any power whatsoever the federal courts have over their procedures. V. Interpreting State Law – when fed court bound to apply state substantive law A. If state court has not decided the issue, or if the decisions on point are old and not current with decisions of other jurisdictions, then fed court may consider the law of other jurisdictions in reaching its decision. The focus of the federal court is to determine what decision the highest court of the state would reach if confronted with the issue. Next: Why am I here? Incentives to Litigate; Remedies Back to Home Back to Civil Procedure I Outline

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Back: Personal Jurisdiction The Erie Doctrine – A federal court, when exercising diversity jurisdiction (or supplemental jurisdiction), must apply the substantive law of the state in which it is sitting. However, federal courts will apply federal procedural law in these diversity cases.  A state law claim sitting in federal court.      I.        Swift v Tyson (1842) - held that federal courts were free to apply the law so as to reach a result they thought was justice regardless of state common law. Overturned by Erie.    II.        Erie Railroad v. Tompkins (1938) A.    Plaintiff walking alongside RR tracks when his right arm was severed by an object protruding from defendant's train; this happened in PA. Plaintiff filed a lawsuit in NY Fed. Court, b/c more favorable for plaintiff. The issue was what level of duty is owed to a trespasser.  If PA law applied then only "wanton negligence" created liability, & no recovery.  If "federal common law" applied the plaintiff could recover if the railroad was guilty of "ordinary" negligence.  B.    Erie held that federal courts in diversity actions apply the substantive law of the state in which they sit. In diversity actions federal courts must treat the decisions of the state courts in the jurisdiction in which they sit as a source of law.  I.e., a federal court in a diversity case must apply the same law that the state court would apply.  There is no longer a "federal common law," a federal court must apply the common law of the state.  The rule of Erie serves the purposes of discouraging forum shopping and avoiding the unfair administration of laws (i.e., avoiding the potential for state and federal courts sitting in the same state reaching different outcomes based on the same facts.)  III.        If there is a federal law (statute, Federal Rule of Civ Pro, etc.) on point, then federal law will apply, provided that it is valid. A.    Ex. Federal Rule 4 permits substituted service of process. Suppose that state law (of the state in which the federal court sits) does not permit substituted service. The court will apply the Federal Rule, because it is on point and is valid. A Federal Rule of Civil Procedure is valid if it is “arguably procedural.”                                           i.    Hanna v. Plumer (1965) – Hanna, from Ohio, sued the estate of Osgood, from Massachusetts, over a car accident in South Carolina. Hanna served process by leaving documents with the wife of the executor, which complied with the FRCP, but not Massachusetts law. The issue was whether a civil action brought in federal court based on diversity jurisdiction, shall service of process be based on the FRCP or on state law.  1.    Erie had established that substantive issues (when it’s the elements of a claim or defense at issue) would use the state law. 2.    In Hanna, the law was procedural, not substantive (service of process). 3.    Supremacy Clause - if federal law is on point, then it trumps state law, as long as it is valid.  FRCP is very likely to be valid.. a.    Rules Enabling Act establishes that FRCP good                                                                                           i.    Rules Enabling Act prevents litigants from challenging the validity of constitutional Federal Rules via the Erie Doctrine, but the rules shall not infringe on substantive right 4.    So, ok to use federal law on the service of process issue in Hanna.  IV.        If there is no Federal Directive on point, a federal judge can still choose to ignore state law, but it depends if the issue is substantive or procedural A.    Substantive – then must follow state law (Erie Problem) B.    Procedural – here is where it becomes a problem. Courts had never really defined this, but has given three ways to approach the problem                                           i.    Outcome-Determinative Test - holds that an issue is substantive if it substantially affects the outcome of the case 1.    Guaranty Trust Co. v. York (1945) – In Guaranty Trust the issue was whether a federal court in a diversity case must apply the state statute of limitations (procedural), which would have barred the suit in state court. Court used the "outcome determinative test."  A state law which is normally regarded as "procedural" should be applied by a federal court in a diversity case if it would, or could, vitally affect the outcome of the case.  a.    Guaranty Trust redefined the Erie doctrine.  The intent of Erie was to insure that where a federal court is exercising jurisdiction solely because of diversity, the outcome of the litigation in federal court should be substantially the same as it would be if tried in State court.   Goal is to avoid reaching a different result in federal court than would otherwise be had in state court.  If applying federal law would mean a different outcome, state law controls therefore state statute of limitations applies.                                          ii.    Balance of Interests Test – the court weighs whether the state or federal judicial system has the greater interest in having its rule applied. 1.    Byrd v. Blue Ridge Electric Cooperative, Inc. (1958) – Byrd brought a tort claim against Blue Ridge. Byrd working as independent contractor, but Blue Ridge says for purposes of the worker’s compensation act he was an employee, b/c he was doing same work as an employee. Issue is who determines if plaintiff falls under workman’s comp? In SC it would the judge.  Under federal law, it was a matter for the jury. This is a procedural issue. a.    Under the outcome-determinative test, the court would have to use state law.  However, court found that the possibility of a different outcome was less important than the right to a jury trial (7th amendment).  Therefore, court doesn’t want to use the outcome-determinative test, and establishes the balance of interests test instead. The federal interest outweighs any state interest, so plaintiff should get a jury trial. b.    But problem with Byrd - never really been told how to apply it.                                         iii.    Forum Shopping Deterrence test – the federal judge should follow state law on the issue if failing to do so would cause litigants to flock to federal court. 1.    Hanna v. Plumer (1965) – a.    Under the outcome-determinative test the defendant would win                                                                                           i.    Court here says that the outcome-determinative test from Guaranty is not absolute because there were more basic principles of Erie. 1.    The Twin aims of Erie were to avoid Forum shopping and the unfair differences in administration of justice between state and federal courts.                                                                                          ii.    Court says that while the outcome of the current case is determined by which law is applied, the rights in question are not substantial enough to create problems of unequal protection. 1.    The Court says that the competing rules, though outcome-determinative, have little or no relevance to the choice of a forum.  You wouldn’t decide to file in state versus federal court based solely on the choice between these two laws.  2.    In the current case the federal and state laws are in direct conflict. The court has been instructed to follow the Federal Rule in these cases and there is no constitutional reason not to do so.                                                                                         iii.    In short, outcome determinative judgments are important for deciding if a state or federal rule applies but in the current case denying the federal rule would remove any power whatsoever the federal courts have over their procedures.    V.        Interpreting State Law – when fed court bound to apply state substantive law A.    If state court has not decided the issue, or if the decisions on point are old and not current with decisions of other jurisdictions, then fed court may consider the law of other jurisdictions in reaching its decision. The focus of the federal court is to determine what decision the highest court of the state would reach if confronted with the issue. Next: Why am I here? Incentives to Litigate; Remedies

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