4. Erie v. Tompkins: Then, in perhaps the most famous Civil Procedure decision of all time, the Court rejected the core holding in Swift v. Tyson. The decision was Erie Railroad v. Tompkins, 304 U.S. 64 (1938). There, the Court held that when the Rules of Decision Act required federal courts in diversity to apply “laws of the several states,” this phrase included a state’s common law, not just its constitutional and statutory provisions. Therefore, a federal court sitting in diversity would normally have to apply state common law principles, and was not free to apply “federal common law.”
a. Facts of Erie: Here are the facts of Erie:
i. Subject of suit: The suit was brought by a Pennsylvania citizen, for damages sustained as a result of being struck while walking along the railroad’s right of way in Pennsylvania, by “something & projecting” from a moving railroad car.
ii. Suit in New York: The railroad was incorporated in New York, so plaintiff Tompkins filed suit in a federal district court there.
iii. Pennsylvania common-law rule: Pennsylvania common law favored the railroad, holding that it had no duty or liability toward people walking along the right of way (these being deemed “trespassers”) unless its negligence was “wanton or willful.”
iv. General federal common law used by District Court: The federal court in New York, following Swift, decided to interpret general common law on its own, and found against the railroad.
b. Supreme Court’s holding in Erie: The Supreme Court reversed, in an opinion by Brandeis. The opinion said that the Rules of Decision Act applies to common law as well as to constitutional and statutory provisions. The Swift doctrine was held unconstitutional, as it allowed the federal courts to make law in areas where the power to do so had never been granted to the federal government by the Constitution. The Court made three distinct arguments:
i. Historical evidence: First, the Court claimed that new evidence had been produced demonstrating that the Rules of Decision Act was intended by its authors to include state common law.
ii. Discrimination: Second, the practical results of Swift v. Tyson were undesirable: “Swift v. Tyson introduced grave discrimination by non-citizens against citizens. It made rights enjoyed under the unwritten ‘general law’ vary according to whether enforcement was sought in the state or federal court; and the privilege of selecting the court in which the right should be determined was conferred upon the non-citizen.” In other words, the Swift doctrine gave the non-citizen the ability to “forum-shop” for the forum most favorable to him.
Note: The requirements of jurisdiction, venue, and removal, taken together, produce the result that it is generally the non-citizen of the forum state who chooses whether state or federal court will serve as the forum.