Today in 1938: The Supreme Court creates the Erie doctrine

April 25, 2014

Today in Legal HistoryWe read a lot of different cases in law school.  And when they appear in textbooks, in an abstract education environment, the significance of some of these cases is lost.

This is even true with some of the most iconic cases of law school – such as Erie Railroad Co. v. Tompkins, which was decided 76 years ago today, on April 25, 1938.

A hallmark ruling of federal civil procedure law, the holding of Erie may be best summarized with a phrase commonly stated by my Federal Jurisdiction professor: “The first rule of federal common law is there is no federal common law.”

That is, Erie held that there can be no federal common law, overruling 1842’s Swift v. Tyson, which had held that federal courts had the authority to disregard state common law (giving deference only to state statutory law), and develop federal common law when deciding matters not specifically addressed by the state legislature in which the action arose.

The facts of Erie began when Harry J. Tompkins, a resident of Pennsylvania, was injured on a dark night by a passing freight train owned by the Erie Railroad Company while walking along its right of way.

The injury occurred in Pennsylvania, but when Tompkins sued in federal court (through diversity jurisdiction, since Erie was incorporated in the state of New York), Tompkins cited principles of federal common law, rather than that of Pennsylvania.  Under federal common law, Tompkins would be regarded as a licensee on the railroad’s property, which would make Erie liable to Tompkins on a showing of ordinary negligence.

By contrast, Pennsylvania common law held that individuals using railroad rights of way such as Tompkins were trespassers, and railroads were not liable for any injuries sustained by such individuals absent a showing that its actions were reckless or wanton.

Because of Swift, Tompkins prevailed at the trial court and appeals court.  However, the Supreme Court agreed to review the case, and reversed the lower court’s ruling – overturning Swift in the process.

The Court’s rationale was that the Constitution does not give federal courts the power to create federal common law.  Moreover, the Court found that Swift had encouraged forum shopping, in that out-of-state litigants could move their actions to federal court if they did not like the common law of the state in which the injury occurred.

Thus, Erie gave birth to the Erie doctrine, which requires federal courts to apply substantive state law when hearing state law claims, rather than making up their own common law.

And without Erie, diversity jurisdiction today would look far different.  Instead of a federal court applying state negligence law in a diversity action between two drivers from different states involved in a car accident, the court would instead have a vast body of common law to draw upon in making its ruling – and disregarding state common law entirely.

And, of course, without Erie, we wouldn’t have the Erie doctrine to perplex law students on civil procedure final exams.

So all you law students out there, keep this in mind when you’re studying for your finals and come across the Erie doctrine and “federal common law.”