The New Federalism and Erie Railroad V. Tompkins

THE NEW FEDERALISM AND ERIE RAILROAD V. TOMPKINS

Common Law and Diversity Jurisdiction

The Constitution distinguishes between the powers of the states and those of the federal government. The states are empowered to make all laws affecting matters of concern to their citizens. The laws enacted by the federal government, on the other hand, are limited to those areas designated by the Constitution. Under our constitutional form of government, the making of laws is a function of the legislature. The courts are expected to interpret and enforce the laws passed. To accomplish this task, however, the courts found it necessary to develop rules, which they standardized, in the interest of maintaining uniformity. These rules, sometimes referred to as common law, differ from state to state. Laws passed by the states or the federal government are called statutory law. The Court's rules had gradually taken on the force of law, some even being adopted by the legislatures of the different states and passed as statutes. In 1789 Congress had passed the Judiciary Act, which required federal courts to use state law when hearing diversity jurisdiction cases, that is, cases involving citizens of different states, but questions soon arose as to what Congress meant by "law." Did it include common law, or was it limited to the statutory law enacted by the different state legislatures only? In 1842, in the case of Swift v. Tysony Supreme Court justice Joseph Story, writing for the majority of the justices, interpreted the word "laws" to mean statutes only. The rules of court made doctrine by the state courts thus became excluded by definition. The federal courts were expected and even encouraged to continue developing their own common law. If, for example, a particular state prohibited its citizens from recovering damages for some types of injury, the federal court could apply its own common law in a way that could produce an entirely different result, and that, in fact, is what happened.

Mr. Tompkins Goes to Court

Late one night in July 1934, near Exeter, Pennsylvania, an iron molder by the name of Harry Tompkins was walking alongside a rail-road track on his way home. A door on a refrigerator car of a passing train unexpectedly flew open, striking Tompkins and knocking him to the ground. As a result of this accident, Tompkins lost an arm. The lawyer retained by Tompkins to represent him in a suit for damages knew that just getting to court posed a major problem. Pennsylvania law classified anyone walking on a railroad right-of-way as a trespasser who was, therefore, denied the right to recover for injuries that might have resulted from his trespass on the railroad's property. The operator of the train, the Erie Railroad, however, had been incorporated in the state of New York, where the courts had ruled differently, respecting the train operator's duty of care toward people like Tompkins. Since a citizen of one state may sue a corporate "citizen" of another in federal court, Tompkins's lawyer proceeded to file his lawsuit in New York. When the case was finally heard in the federal district court in New York, the railroad's attorney's objection to the federal court's use of New York instead of Pennsylvania common law was overruled. Tompkins won his suit and was awarded thirty thousand dollars.

The Erie Rule

The Erie Railroad appealed and again lost, the federal circuit court of appeals applying the precedent established in Swift v. Tyson, Not satisfied, the railroad took the case to the Supreme Court. Given ninety-six years of precedent, no one could have anticipated what happened next. The Supreme Court rejected the reasoning of Swift and, in doing so, broke with a tradition that had permitted federal courts to impose their own law upon the states under the constitutional protection afforded by the Swift decision. The decision came to be considered one of the most momentous of all those issued by the Court during the New Deal era. From that point on, federal courts were required, in cases where there was diversity jurisdiction, to apply state law, whether that passed by the legislature or that developed by the state courts. Federal common law would be restricted to areas of purely federal concern.

Sources:

Gerald T. Dunne, Hugo Black and the Judicial Revolution (New York: Simon & Schuster, 1977);

Newsweek (16 May 1938).