CaseCast™ – "What you need to know"
Brief Fact Summary. Defendant Harry Tompkins, was injured by a freight car of Plaintiff Erie Railroad while in Hughestown, Pennsylvania. Defendant brought suit in federal district court in New York, asking the judge to apply “general law” regarding negligence, rather than Pennsylvania law, which required a greater degree of negligence.
Synopsis of Rule of Law. Except in matters governed by the United States Constitution or Act of Congress, the law that is to be applied in any case is the law of the state.
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.View Full Point of Law
Issue. Whether a Federal court sitting in diversity jurisdiction, should apply the substantive law of the state the activities leading to the suit arose in, or the law of the Federal court in the forum state.
Held. The Supreme Court reversed the decision of the court of appeals, holding that except in matters governed by the United States Constitution or Act of Congress, the law that is to be applied in any case is the law of the state. There is no Federal common law.
Dissent. The dissenting opinions of Justices Butler and McReynolds are omitted by the casebook. Concurrence. Justice Reed concurred. Justice Reed agreed with the majority to the extent that he thought where Congress has not spoken, then a Federal court should apply the law of the state in which the activities arose. However, he disagreed that there could be no such thing as “federal common law,” finding instead that Congress has the power to declare what rules of substantive law the federal courts shall use.
Discussion. The primary rationale for the Supreme Court’s decision here was the prevention of forum shopping, whereby, under the old policy of allowing a federal court to ignore the state’s substantive law and instead apply “general law” made it so that the substantive law that was applied in each case varied according to enforcement was sought in the state or federal court. Moreover, in asserting that there is no such thing as federal common law, the court is probably referring to judicial common law. Common law, Congress implicitly retained the right to pass rules governing the federal courts, e.g. the Federal Rules of Civil Procedure, etc.