Rules of Decision Act 28 U.S.C.

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 U.S.C. 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 magistrates 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. Two General Approaches: two separate principles of vertical choice of law. Hanna Approach: Given a clash of fed/state law: fed court must apply fed law if congress has directed it to do so Rules of Decision or Erie Approach: is it substantive? => state law, is it procedural? => fed law Purpose: General concepts of federalism, recognizing the need for a separate federal system, while enduing states sovereignty through adhering to, or acting in the same manner as a state court would on the matter confusion arises through the inherent difficulty of separating procedure/substance, and the courts application of different factors to different cases, as well as applying the same factors but in differing manners. essentially courts have picked apart the applied tests in such a way that they can effect different outcomes with the same applied criteria using parallel reasoning for divergent outcome general questions is the purpose of a rule to effect a states ability to dictate when a party may recover? is the issue "bound up with the definitions of the rights and obligations of the parties?" yes? state law applies statute of limitations choice of law General Application of Principles Is there a conflict between state and federal law? :: Hanna => Broadened in Stewart? ex. Walker FRCP rule 3 may conflict with state SOL, BUT, construed narrowly as they did, there is no conflict between the rule for commencing an action and the state SOL, so: See if rule can be construed narrowly so that there is no conflict if there is a good argument for narrow construction, analyze what happens if the court does not rule this way if there is not a good narrow construction argument, dismiss it and analyze the conflict Distinguish Between Substance and Procedure: as they relate to Rules of Decision Act/Erie What is the Source of the Federal Law Constitution SUPRA: Always wins - substantive or procedural Federal Statute If valid, generally supreme: in its application consider Hanna: modified outcome determinative test "rationally capable of classification as either substance or procedure" consider likelihood to incentivize/prevent forum shopping Is there an inequitable administration Stewart Does the Statute cover the point in dispute Is this a constitutional exercise of congressional authority FRCP Hanna: there is a presumption that FRCP are procedural does it deal with the process for enforcing rights and duties? Rules Enabling Act(REA) does the rule abridge , enlarge, or modify a substantive right? no?: fed rule wins yes?: fed rule might not win Byrd: are state created rights and obligations bound up with the rule? whats the policy rationale for the federal court doing things as it does

Burlington: does it only incidentally affect the process of enforcing litigants rights? Judicial Erie: invalid if they purport to establish rules of primary behavior that there is no federal power to make (substantive) Hanna: modified outcome determinative Byrd: Importance of the federal interest Vertical v. Horizontal Vertical Choice of law: Fed or State Horizontal Choice of law: one state or another state, or one fed court to another fed court Consider Effects vertical choice of law can have on horizontal choice of law creating uniformity vertically can erode uniformity horizontally, and visa versa Procedural vs. Substantive While something on its face can seem to be procedural, or even genuinely be procedural, the effects of its implementation be inherently substantive. If the chain shows that the consequence of procedure is substantive, must it be treated as substantive at the outset, or are we only concerned with the effect on the face of things. Looking beyond this point it would seem that most things could become substantive(if not on their face, in their effect) - effectively deteriorating the force of federal rules and statutes to any cases not arising directly out of federal law. General Points When: Erie determinations revolve around the implementation of state or federal law within either diversity suits, or cases of supplemental jurisdiction. Resolving a dispute often involves a consideration of whether the law to be applied is one of substantive or procedural nature. typically federal procedural laws will be applied, while state substantive laws will be applied. This consideration generally arises out of the query into whether or not there is a conflict between the fed and state law What: given a conflict, a court will then analyze the constitutionality of the FRCP/Fed law (Hanna) the general presumption is that the FRCP is procedural and should be applied this is derived from the REA, authorizing the creation of the FRCP by the Supreme Court with Congress' approval as the rules are limited, and go through the approval of the Advisory Committee, The Supreme Court, and Congress - declaring a FRCP to be substantive rather than procedural would be a significant challenge to all of these parties. REA (b) does allow for the review of FRCP nonetheless Indications that a rule is procedural does not directly pertain to a specific type/subject matter of case does not specifically favor a given party what is the source of the states rule in conflict? is it from the state RCP? When it appears that there is no conflict between the FRCP and State Law Look to an approach through Byrd, Hanna, or York. Consider here both the Outcome determinative test, as well as how this is likely to effect forum shopping at the outset. something may not be outcome determinative, but it may be determinative in forum choice. If it promotes forum choice/forum selection - it is no good under york/hanna Byrd may also consider the federal interests in applying the federal law in question Reverse Chronology of Cases Stewart Organization v. Ricoh Corp (1988) :: Applies Hanna Diversity Suit: Forum selection Clause providing that any dispute arising out of the contract could be brought only in Manhattan. Suit filed in Alabama ! moved to xfer to nyc based on K forum selection clause District court denied: reasoning that Alabama law applies, and Alabama doesnt uphold forum selection clauses. Court of appeals reverses.

Supreme court (marshall) : federal law, not state law controlled Is the fed statute sufficiently broad? Does it control the issue/point in dispute? If congress intended to reach the issue before the court, and if it enacted its intention into law in a manner that abides with the constitution, that is the end of the matter. MUST APPLY a fed statute that controls the issue before the court and that represents a valid exercise of Congress' constitutional power. Prof. Ely: is this a situation where congress intended the statute to apply? This is an overextension raises separation of powers issues Scalia dissent: Justice Scalia dissented from the majority opinion, arguing that there was no direct collision between 1404 and Alabama's law, and therefore the appropriate inquiry is whether the Rules of Decision Act, 28 U.S.C. 1652, mandated the use of state law. Applying the RDA analysis in Hanna v. Plumer, Scalia argued that state law governed the question because venue selection would encourage forum shopping, and that the choice of venue was highly outcome determinative because "[i]t is difficult to imagine an issue of more importance, other than one that goes to the very merits of the lawsuit, than the validity of a contractual forum-selection provision." Burlington Northern (1987) :: Applies Hanna :: posting $ for appealThe defendant in the original case stayed a damage judgment and went on to lose on appeal. According to an Alabama statute, the defendant would be required to pay a ten percent penalty. Under Federal Rules of Appellate Procedure Rule 38, the penalty was discretionary. Holding the federal rule to be on point and constitutional, the court applied federal rule and gave no penalty Walker (1980):: same situation as Ragan re: statute of limitations, court held the two to be indistinguishable and also upheld state law. statute of limitations is a statement of a substantive decision by that state that actual service on, and accordingly actual notice by, the ! is an integral part of the several policies served by the statute of limitations statute establishes a deadline after which ! may legitimately have peace of mind; and recognizes that after a certain period of time it is unfair to require the ! to attempt to piece together his defense to an old claim Hanna (1965) :: A dismissal for improper service under these facts would not alter the substantive right of Hanna to serve Plumer personally and refile or affect the substantive law of negligence in the case. Article III and the Necessary and Proper Clause provides that the Congress has a right to provide rules for the Federal Court (FRCP 4(d)(1). Plumers arguments for the application of state law are flawed. Under Byrd, federal courts must apply federal law in certain situations regardless of whether choice of law would be outcome determinative. modified outcome determinative - does it promote forum shopping process for enforcing rights/duties Byrd (1958) :: The Court held that South Carolinas determination that immunity was a question of law to be decided by a judge was merely a determination of the form and mode of enforcing immunity. It did not involve any essential relationship or determination of rights created by state law. The court held that the Erie doctrine can still reach form and mode determinations if there are no affirmative countervailing considerations. Courts held that this probably would not have effected the outcome test, but also that it was merely procedural, merely a form and mode of enforcing immunity - but not an effect on that immunity Also took issue with barring access to right to jury by 7th amendment Bernhardt (1956):: can arbitration provision be enforced? in Vermont it can be revoked at any time - court upholds state law which permits the clause to be revoked cites york for outcome determinative saying that arbitration or trial can effect different results also makes the point that trial by jury is guaranteed by 7th amendment and Vermont constitution Ragan (1949) :: personal injury in filed kansas within fed statute of limitations R3, but kansas law states statute not tolled until service on !. suit was filed before kansas statute tolled as well - so at time of filing there was no difference - but kansas statute ran out before ! was served. if recovery could not be had in the state court, it should be denied in the federal court subjects FRCP to ERIE? Cohen (1949): ::Stockholder derivative, nj state statute held that " post a bond in order to bring the action, but FRCP 23 imposed no requirement. Supreme court held that the provisions did

not have a conflict, and applied the NJ statute. based on outcome determinative this seems a bit ridiculous as it does not deal with the merits of the case, or a given right in any sense, but rather deals with a need to put up money in order to sue. If it is outcome determinative - it is only so, to the extent that some people can afford to put up the bond, and others cannot York (1945) OUTCOME DETERMINATIVE:: state statute of limitations or federal statute of limitations :: PROBLEM: cant everything be outcome determinative - doesn't this erode FRCP/Federal law - "Applied literally, very little would remain of the FRCP in diversity cases, for almost every procedural rule may have a substantial effect on the outcome of a case" - if not carried to its limits, confusion of how far to go Outcome determinative test - essentially taking issue with the endeavor to disentangle substantive/procedural. does the statute effect the manner/means by which a right to recover is enforced or; does it significantly affect the result of a litigation for a federal court to disregard a law of a state that would be controlling in an action upon the same claim by the same parties in a state court: immaterial whether substantive or procedural Where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a state court EQUITABLE RIGHTS: language pertaining to federal courts upholding federal law in the event that there is a conflict between the state and fed law. Although this seems to be held to certain rights such as the right to a trial jury Klaxon (1941) :: conflict of laws rule applied, must be the conflict of laws rule of that state, not of the federal courts Prof Hart: but is uniformity within the states better achieved through a uniform federal substantive law? Erie v. Tompkins (1938) FEDERAL OR PROCEDURAL? :: penn law says no duty, fed law says duty to man hit by train In diversity cases, federal courts must apply state law as declared by the highest state court in addition to state statutory law. There is no federal general common law. Congress has no power to declare substantive rules of common law applicable in a State and the Constitution does not confer such a power upon the federal courts. The Swift decision is flawed because it promotes forum shopping. Citizens of one state could move to another state to create diversity and bring suit in federal court to take advantage of a more favorable choice of law. Such a defect is substantial and provides no benefit. "In all matters except those in which some federal law is controlling, the federal courts exercising jurisdiction in diversity of citizenship cases would apply as their rules of decision the law of the state, unwritten as well as written" "Congress has no power to declare substantive rules of common law applicable in a state" reed concurring in part "the line between procedural and substantive law is hazy but no one doubts federal power over procedure" Swift v. Tyson (1842)(OVERTURNED BY ERIE) :: federal law held something was sufficient consideration, while new york law said it didn't Court held that rules of decision act does not apply state common law, but merely statutes etc. resulted in applying federal law Attempted to promote equal protection of the law in applying the same law across the states, but eroded equal protection of the law within the state. - brandeis, referring not to equal protection in the sense of the constitution, but in the sense of criticizing the practice of forum shopping. discriminated against in state !'s subject to suit from out of state "