The Substance/Substance Distinction
As “Easy Erie” suggests, the Erie doctrine is applied without substantial difficulty in most diversity cases. Erie and the Rules of Decision Act (RDA) require the federal court to apply state law, and the court does. It uses the state rules governing the standard of care to a trespasser, enforceability of contracts, the validity of wills and property transfers, and myriad other state rules of law, whether pronounced by statute or by common law.
It sounds easy, and often it is easy. But not always. Lurking behind the majestic and simple truths of the Erie case were some complex implications, which, if not foreseen by the Erie justices, have certainly bedeviled their successors. These implications are so subtle and important to our ideas of federalism that they have fascinated law professors as well. Consequently, while they play a relatively minor part in the daily administration of diversity jurisdiction, they figure prominently in the first-year Civil Procedure course.
The most puzzling problem, of course, has been determining which issues are governed by the command of Erie. Clearly, Erie requires federal courts to apply state law to issues upon which there is no federal lawmaking power. For example, neither Congress nor the federal courts have any authority to establish the standard of care generally owed to trespassers. Thus, the RDA, as interpreted in Erie, requires the federal court to apply state law on this “substantive” issue. But it is doubtful that the Court ever thought that Erie’s command would require federal courts to follow state law on clearly procedural issues in diversity cases.