Eerie Erie

326 U.S. at 109. If following a federal practice that differed from state procedure might “significantly affect the result of a litigation” (Id.), the court must apply the state rule instead, to prevent diverse parties from gaining unfair advantages simply because they can choose federal court. In York, this “outcome-determinative” test dictated use of the state limitations statute, since the claim was barred under that statute but might have been allowed to proceed under the federal laches doctrine.

In retrospect, it is clear that York and Cities Service Oil extended the Erie doctrine well beyond the area where application of state law was compelled by the United States Constitution. Erie required the lower federal court to apply the state duty of care because neither the federal courts nor Congress has constitutional authority to create rules of tort law.[2] However, York and Cities Service Oil involved situations in which there was federal authority to create a separate rule for the federal courts. The Constitution grants Congress the power to establish lower federal courts (Article III, §1), and to make laws “necessary and proper” for exercising that power. Article I, §8. Thus, there is constitutional authority to make federal procedural rules, even for diversity cases, presumably including the authority to provide a federal limitations period in a case like York, or a burden of proof rule for a case like Cities Service Oil. Despite this federal authority, York’s outcome-determinative test required federal courts to apply state law, as a matter of policy, not constitutional compulsion, where using a separate federal rule could lead to a different outcome. Although the Court in York could have applied the separate federal laches rule, it concluded that uniformity of outcomes in state and federal court was more important than following a separate federal rule whenever it constitutionally could. Where Erie had commanded, “follow state tort law, because ‘there can be no other law,’ ”[3] York pronounced, “follow state law, even where there can be federal law, if it will further the policy of uniform outcomes in state and federal court in diversity cases.”

However, this uniformity policy clearly could have a drastic impact on federal procedure in diversity cases. Suppose that state law allows 30 days to answer a complaint and federal law only allows 20. If Clinton files suit in federal court, and Fisk answers on the twenty-fifth day, that difference could be outcome determinative. If Clinton serves Fisk by leaving the summons and complaint at his last and usual place of abode (see Fed. R. Civ. P. 4(e)(2)), but state law requires personal delivery to Fisk, that difference may be outcome determinative. If federal law allows Clinton to amend his pleadings to add new claims after the limitations period passes, but state law does not, that also may be outcome determinative. At its broadest, York would mandate use of the state rule in each of these cases, although there is federal constitutional authority to establish a different rule. If so, it should be clear that there would not be much left of the Federal Rules of Civil Procedure in diversity cases.