Wed. Apr. 16

1
Wed. Apr. 16
2
Erie
3
Tompkins (a PA domiciliary) sues Erie (a NY
domiciliary) in NY state court concerning an
accident in PACan NY use its own standard of
care?Can NY use its own procedure?
4
Tompkins sues Erie in federal court in NY
concerning an accident in PACan the federal
court apply a federal common law standard of
care?Can the federal court use federal
procedure?
5
P sues D in federal court in New York under New
York lawCan the federal court apply a federal
common law limitations period or must it apply
New Yorks?
6
Guaranty Trust v York(US 1945)
7
It is therefore immaterial whether statutes of
limitation are characterized either as
"substantive" or "procedural" in State court
opinions in any use of those terms unrelated to
the specific issue before us. Erie R. Co. v.
Tompkins ... expressed a policy that touches
vitally the proper distribution of judicial power
between State and federal courts. In essence, the
intent of that decision was to insure that, in
all cases where a federal court is exercising
jurisdiction solely because of the diversity of
citizenship of the parties, the outcome of the
litigation in the federal court should be
substantially the same, so far as legal rules
determine the outcome of a litigation, as it
would be if tried in a State court.
8
A Mississippi statute requires a corporation
doing business within the state to designate an
agent for the service of process before bringing
suit. Should this statute be used by a federal
court in Mississippi?
9
A New Jersey statute requires small shareholders
bringing derivative actions to post a bond.
Should this statute be used by a federal court
in New Jersey for a derivative action under
Delaware law?
10
Byrd v. Blue Ridge Elec. Coop. (US 1958)
11
First. It was decided in Erie R. Co. v. Tompkins
that the federal courts in diversity cases must
respect the definition of state-created rights
and obligations by the state courts. We must,
therefore, first examine the state rule to
determine whether it is bound up with these
rights and obligations in such a way that its
application in the federal court is required.
12
Is a federal court forbidden to use its power to
create procedural common law to displace state
substantive law in federal court?Is Congress
forbidden to use its power to create procedural
law for federal courts to displace state
substantive law?
13
P sues D in federal court in NY under PA law.
PAs statute of limitations is bound up with
the PA cause of action. A NY state court would
use NYs statute of limitations anyway.What
statute of limitations should the federal court
use?
14
But cases following Erie have evinced a broader
policy to the effect that the federal courts
should conform as near as may be -- in the
absence of other considerations -- to state rules
even of form and mode where the state rules may
bear substantially on the question whether the
litigation would come out one way in the federal
court and another way in the state court if the
federalcourt failed to apply a particular local
rule.
15
But there are affirmative countervailing
considerations at work here.
16
Hanna v. Plumer(US 1965)Suit in fed ct in MA
under MA lawShould MAs service rule be used or
can the ct use the FRCP governing service
instead?
17
The Erie decision was also in part a reaction
to the practice of 'forum-shopping' which had
grown up in response to the rule of Swift v.
Tyson. That the York test was an attempt to
effectuate these policies is demonstrated by the
fact that the opinion framed the inquiry in terms
of 'substantial' variations between state and
federal litigation. Not only are nonsubstantial,
or trivial, variations not likely to raise the
sort of equal protection problems which troubled
the Court in Erie they are also unlikely to
influence the choice of a forum. The
'outcome-determination' test therefore cannot be
read without reference to the twin aims of the
Erie rule discouragement of forum-shopping and
avoidance of inequitable administration of the
laws.
18
There is, however, a more fundamental flaw in
respondent's syllogism the incorrect assumption
that the rule of Erie R. Co. v. Tompkins
constitutes the appropriate test of the
validity, and therefore the applicability, of a
Federal Rule of Civil Procedure. The Erie rule
has never been invoked to void a Federal Rule.
19
The constitutional provision for a federal
court system (augmented by the Necessary and
Proper Clause) carries with it congressional
power to make rules governing the practice and
pleading in those courts, which in turn includes
a power to regulate matters which, though falling
within the uncertain area between substance and
procedure, are rationally capable of
classification as either.
20
Could Congress pass a uniform limitations period
for state law actions brought in federal court?
21
28 U.S.C. 2072. - Rules of procedure and
evidence power to prescribe (a) The Supreme
Court shall have the power to prescribe general
rules of practice and procedure and rules of
evidence for cases in the United States district
courts (including proceedings before magistrate
judges thereof) and courts of appeals. (b) Such
rules shall not abridge, enlarge or modify any
substantive right. . . .
22
Under the cases construing the scope of the
Enabling Act, Rule 4(d)(1) clearly passes muster.
Prescribing the manner in which a defendant is to
be notified that a suit has been instituted
against him, it relates to the practice and
procedure of the district courts. The test
must be whether a rule really regulates
procedure, - the judicial process for enforcing
rights and duties recognized by substantive law
and for justly administering remedy and redress
for disregard or infraction of them. Sibbach v.
Wilson Co.
23
Erie flow chart...
24
is the federal court sitting in
diversity/alienage or is there a cause of action
with supplemental jurisdiction? NO?- Example
P sues D in federal court in New York under
federal securities lawno Erie problem - no need
to worry about state procedural law
25
ButThe FRCP or federal statute at issue might
still be invalid- e.g. FRCP might abridge
enlarge or modify the federal substantive right
26
is the federal court sitting in
diversity/alienage or is there a cause of action
with supplemental jurisdiction?YES
27
is the relevant federal procedural law mandated
by the U.S. Constitution? E.g. 7th A if yes it
applies
28
Is the relevant federal procedural law a federal
statute? if yes it applies if it is arguably
procedural it does not matter if it leads to
forum shopping
29
Really? Could Congress pass a 3-year statute of
limitations for tort actions brought in federal
court that displaced a 2-year statute of
limitations that a state had bound up with its
cause of action?
30
Is the relevant federal procedural law a Fed. R.
Civ. P.?if yes only questions are - is it
arguably procedural and - does it abridge
enlarge or modify substantive rights (Sibbach
test? Shady Grove?)
31
28 U.S.C. 2072. - Rules of procedure and
evidence power to prescribe (a) The Supreme
Court shall have the power to prescribe general
rules of practice and procedure and rules of
evidence for cases in the United States district
courts (including proceedings before magistrate
judges thereof) and courts of appeals. (b) Such
rules shall not abridge, enlarge or modify any
substantive right. . . .
32
how can you tell if you are in the FRCP track?
33
Walker Application of the Hanna analysis i.e.
FRCP track is premised on a direct collision
between the Federal Rule and the state law. 
34
federal rule (suggested by FRCP 3) tolling of
statute of limitations at filingforum state
rule tolling at servicewhich applies in a
diversity case?
35
Rule 3. Commencing an ActionA civil action is
commenced by filing a complaint with the court.
36
is the relevant federal procedural law common
law? - remember, includes cases in which the
federal court simply doesnt have anything on
point, but doesnt do what the forum state does
37
1st is the state rule is bound up with the cause
of action (Byrd) if so, use state
lawexamples?- statute of limitations folded
into a statutory cause of action- burden of
proof for contributory negligence
38
Really? Could a state compel federal courts to
limit the page length of briefs by folding up a
rule into the cause of action...?
39
not bound up?
40
Look to twin aims of Erie- would having a
federal common law rule different from the forum
states rule lead to - vertical forum shopping
- inequitable administration of the laws?
41
forum shopping in general, not in the particular
case
42
The best explanation of what constitutes
inequitable administration of the laws is that
found in Erie itself allowing an unfair
discrimination between noncitizens and citizens
of the forum state. Whether discrimination is
unfair in this context largely turns on how
important is the matter in question. The decision
of an important legal issue should not turn on
the accident of diversity of citizenship, or the
presence of a federal question unrelated to that
issue. Stewart Organization, Inc. v. Ricoh Corp.
(US 1988) (Scalia, J. dissenting)
43
P(NY) sues D(NY) in state court in NY concerning
a car accident in NY. Action gets dismissed due
to the NY 2-year statute of limitations.P(NY)
sues D(Pa) in federal court in NY concerning a
car accident in NY.Federal court applies a
common law time limit and lets the action proceed.
44
Why are we concerned about forum shopping?What
is inequitable about vertical procedural
differences?
45
P sues D on a Pa cause of action in Miss state
ct.The Pa 2 year statute of limitations is not
bound up with the Pa cause of action.The Miss
state court applies its own longer statute of
limitations.
46
28 USC 1652 - State laws as rules of
decisionThe laws of the several states, except
where the Constitution or treaties of the United
States or Acts of Congress otherwise require or
provide, shall be regarded as rules of decision
in civil actions in the courts of the United
States, in cases where they apply.
47
Rules of Decision Act AnalysisRelatively
unguided Erie choice
48
28 U.S. Code 1332 - Diversity of citizenship
amount in controversy costs(a)The district
courts shall have original jurisdiction of all
civil actions where the matter in controversy
exceeds the sum or value of 75,000, exclusive of
interest and costs, and is between (1)citizens
of different States (2)citizens of a State and
citizens or subjects of a foreign state, except
that the district courts shall not have original
jurisdiction under this subsection of an action
between citizens of a State and citizens or
subjects of a foreign state who are lawfully
admitted for permanent residence in the United
States and are domiciled in the same State
(3)citizens of different States and in which
citizens or subjects of a foreign state are
additional parties and (4)a foreign state,
defined in section 1603(a) of this title, as
plaintiff and citizens of a State or of different
States.
49
if no problem of forum shopping/ineq. admin.,
then use uniform federal common law
ruleexample federal common law rule concerning
service
50
if there is a problem of forum shopping/ineq.
admin., then use forum state rule- unless
sufficiently strong countervailing federal
interests in favor of the uniform federal common
law rule
51
P (NY) sues D (Germany) in federal court in NY on
a German cause of action that arose in
Germany.NY has no doctrine of forum non
conveniensFederal courts have created a federal
common law doctrine of forum non conveniens
outside of diversity/alienage cases that would
dismiss the case.
52
- Colorado passed a Certificate of Review
Statute - anyone suing a licensed professional
for malpractice must provide, with the complaint
filed, a certificate stating that an expert in
the licensed professionals area of practice has
examined the claim and has determined that it has
substantial justification.  - P (a citizen of
New York) sues D (a citizen of Colorado) in the
Federal District Court for the District of
Colorado for medical malpractice under New York
law.  - Ps suit concerns an operation that D
performed upon P in New York City.  P does not
file a Certificate of Review with her complaint. 
In his answer, D asks that the action be
dismissed for failure to file a Certificate of
Review.  What result and why?
53
A federal court sitting in diversity in Del.
needs to determine whether Pa. or NY law
appliescan it use federal common law choice of
law rules?NO must use the choice of law rules
of the forum state
54
Klaxon v. Stentor Mfg. Co. (US 1941)
55
P sues D in federal court in New York under 42
USC 1983 for civil rights violations. 1983 does
not have its own statute of limitations, so
federal courts borrow from analogous state
statutes. New York's statute of limitations ran
out between the time that P filed in federal
court and the time P served D. Under the federal
rule, statute of limitations are tolled at
filing. Under the New York state rule they are
tolled at service. Is P's action barred? West v
Conrail (U.S. 1987)
56
Shady Grove Orthoped. Assoc. V. Allstate (U.S.
2010)
57
Allstate refused to pay NY statutory interest on
late payment of claims- class action against
Allstate for the interest
58
N. Y. Civ. Prac. Law Ann. 901(no class actions
for penalties or statutory minimum damages)
59
Rule 23(a) provides (a) Prerequisites. One or
more members of a class may sue or be sued as
representative parties on behalf of all members
only if (1) the class is so numerous that
joinder of all members is impracticable (2)
there are questions of law or fact common to the
class (3) the claims or defenses of the
representative parties are typical of the claims
or defenses of the class and (4) the
representative parties will fairly and adequately
protect the interests of the class. Subsection
(b) says that a class action may be maintained
if Rule 23 (a) is satisfied and if the suit
falls into one of three described categories
(irrelevant for present purposes).
60
Scalia (with Thomas, Roberts Sotomayor)
61
Scalia The fundamental difficulty with these
arguments is that the substantive nature of New
Yorks law, or its substantive purpose, makes no
difference. A Federal Rule of Procedure is not
valid in some jurisdictions and invalid in
othersor valid in some cases and invalid in
othersdepending upon whether its effect is to
frustrate a state substantive law (or a state
procedural law enacted for substantive purposes).
That could not be clearer in Sibbach
62
Scalia In sum, it is not the substantive or
procedural nature or purpose of the affected
state law that matters, but the substantive or
procedural nature of the Federal Rule. We have
held since Sibbach , and reaffirmed repeatedly,
that the validity of a Federal Rule depends
entirely upon whether it regulates procedure. If
it does, it is authorized by 2072 and is valid
in all jurisdictions, with respect to all claims,
regardless of its incidental effect upon
state-created rights.
63
Assume there is a new FRCP that determines who
has the burden of proof for contributory
negligence is it valid?
64
Stevens
65
StevensThe New York law at issue, N. Y. Civ.
Prac. Law Ann. (CPLR) 901(b) (West 2006), is a
procedural rule that is not part of New Yorks
substantive law. Accordingly, I agree with
Justice Scalia that Federal Rule of Civil
Procedure 23 must apply in this case and join
Parts I and IIA of the Courts opinion. But I
also agree with Justice Ginsburg that there are
some state procedural rules that federal courts
must apply in diversity cases because they
function as a part of the States definition of
substantive rights and remedies.
66
Imagine that a class action for statutory
penaties under Pennsylvania law had been brought
in state court in New York. Would section 901
have applied?
67
Imagine that a class action for statutory
penaties under New York law had been brought in
state court in Pennsylvania. Would section 901
have applied?
68
Justice Scalia believes that the sole Enabling
Act question is whether the federal rule really
regulates procedure,which means, apparently,
whether it regulates the manner and the means by
which the litigants rights are enforced. I
respectfully disagree. This interpretation of the
Enabling Act is consonant with the Acts first
limitation to general rules of practice and
procedure,2072(a). But it ignores the second
limitation that such rules alsonot abridge,
enlarge or modify any substantive right,
2072(b) (emphasis added), and in so doing
ignores the balance that Congress struck between
uniform rules of federal procedure and respect
for a States construction of its own rights and
remedies. It also ignores the separation-of-powers
presumption, and federalism presumption that
counsel against judicially created rules
displacing state substantive law.
69
Ginsburg (with Kennedy, Breyer, Alito)
70
GinsburgThe Court today approves Shady
Groves attempt to transform a 500 case into a
5,000,000 award, although the State creating the
right to recover has proscribed this alchemy. If
Shady Grove had filed suit in New York state
court, the 2 interest payment authorized by New
York Ins. Law Ann. 5106(a) (West 2009) as a
penalty for overdue benefits would, by Shady
Groves own measure, amount to no more than 500.
71
In sum, both before and after Hanna , the
above-described decisions show, federal courts
have been cautioned by this Court to interpret
the Federal Rules with sensitivity to important
state interests, and a will to avoid conflict
with important state regulatory policies. The
Court veers away from that approachin favor of a
mechanical reading of Federal Rules, insensitive
to state interests and productive of discord.
72
Is the relevant federal procedural law a Fed. R.
Civ. P.?if yes only questions are - is it
arguably procedural and - does it abridge
enlarge or modify substantive rights (must
consider state substantive policies)