Petitioner sued Respondent for negligence. Respondent argued the Petitioner could not sue under South Carolina’s Workmen’s Compensation Act.
The outcome determinative test from Guaranty Trust Co. v. York is not conclusive, courts must also consider federal policy when determining whether to apply state or federal law.
Byrd (Petitioner), a citizen of North Carolina, sued Blue Ridge Rural Electric Cooperative (Respondent), a South Carolina corporation, under diversity jurisdiction in federal court for negligence that caused his injury while employed as an independent contractor. Respondent argued that Petitioner was considered an employee under the South Carolina Workmen’s Compensation Act and thus could not sue Respondent.
Should state law requiring determination by a judge prevail over the federal practice of jury determination of disputed factual issues?
No, federal policy considerations outweigh the application of state law. The decision of the Court of Appeals is reversed and remanded.
The Court determined that South Carolina’s law was a procedural law, separate from state substantive rights. The Court then determined that it was necessary to consider more than just the affect on the outcome of the case, but also essential federal policies. Weighing the likelihood of a different outcome with the strength of the Seventh Amendment, the Court found that the right to a jury prevailed over state law.