Erie R.R. Co. v. Tompkins

Brief Fact Summary

In a personal injury suit, federal district court trial judge refused to apply applicable state law since the law was “general†(judge-made) and not embodied in any statute.

Synopsis of Rule of Law

Although the 1789 Rules of Decision Act left federal courts free to apply their own rules of procedure in common-law actions brought in federal court, state law governs substantive issues.  State law includes case law as well as statutory law.

Facts

Tompkins (Plaintiff) was walking in a right of way parallel to some railroad tracks when an Erie Railroad (Defendant) train passed by.  Plaintiff was struck and injured by what he claimed at trial to be an open door extending from one of the rail cars.  Under Pennsylvania case law (the applicable law because the accident occurred there), state courts would have treated Plaintiff as a trespasser in denying him recovery for other than wanton or willful misconduct on the party of Defendant.  Under “general†law, recognized in federal courts, Plaintiff would have been regarded as a licensee and would only have been obligated to show ordinary negligence.  Since Erie (Defendant) was a New York corporation, Plaintiff brought suit in a federal district court in New York, where he won a judgment for $30,000.  Upon appeal to a Federal Circuit Court, the decision was affirmed.

Issue

Was the trial court in error by refusing to recognize state case law as the proper rule of decision in deciding the substantive issue of liability?

Held

(Brandeis, J.)  Yes.  The Court’s opinion is in four parts: (1) Swift v. Tyson, 41 U.S. (16 Pet.) 1 (1842), which held that federal courts exercising jurisdiction on the ground of diversity of citizenship do not need, in matters of general jurisprudence, to apply the unwritten law of the state as declared by its highest court, is overruled.  Section 34 of the Federal Judiciary Act of 1789, c. 20, 28 U.S. § 725 requires that federal courts in all matters except those where some federal law is controlling, apply as their rules of decision the law of the state, unwritten as well as written.  Up to this time, federal courts had assumed the power to make “general law†decisions even though Congress was powerless to enact “general law†statutes.  (2) Swift had many political and social defects.  The uniformity hoped for among state courts had not occurred, and there was no satisfactory way to distinguish between local and general law.  On the other hand, Swift introduced grave discrimination by non-citizens against citizens.  The privilege of selecting the court for resolving disputes rested with the non-citizen who could choose the more favorable forum.  The result was far-reaching discrimination due to the broad province accorded “general law†in which numerous matters of seemingly local concern were included.  In addition, local citizens could move out of the state and bring suit in a federal court if they were disposed to do so; corporations, similarly, could just reincorporate in another state.  The unconstitutionality of Swift is clear in this case as more than statutory relief is involved.  (3) Except in matters governed by the Federal Constitution or by acts of Congress, the law of the state is the law to be applied in any case.  There is no federal common law.  The federal courts have no power derived from the Constitution or by Congress to declare substantive rules of common law applicable in a state whether they are “local†or “general†in nature.  (4) The federal district court was bound to follow the Pennsylvania case law that would have denied recovery to Tompkins (Plaintiff).  Reversed.

Concurrence

(Reed, J.)  It is not necessary to go beyond interpreting the meaning of “laws†in the Rules of Decision Act.  Article III, and the Necessary and Proper Clause of Article I, of the Constitution might provide Congress with the power to declare rules of substantive law for federal courts to follow.

Discussion

Erie can fairly be characterized as the most important and far-reaching decision on civil procedure the U.S. Supreme Court has ever handed down.  As interpreted in decisions that followed, Erie held that while federal courts may apply their own rules of procedure, issues of substantive law must be decided according to applicable state law, usually the state where the federal court sits.  However, note how later Supreme Court decisions have made advances into the broad doctrine expressed here.