Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), argued 31 Jan. 1938, decided 25 Apr. 1938 by vote of 8 to 0; Brandeis for the Court; Butler, McReynolds, and Reed concurring; Cardozo not participating. The Judiciary Act of 1789 provided that “the laws of the several states … shall be regarded as rules of decision in trials at common law” in federal courts (sec. 34). This provision, which in modern times is known as the Rules of Decision Act, requires federal courts to follow state substantive law in cases where the federal courts have jurisdiction because the parties are citizens of different states, but does not define the sources of state law. In Swift v. Tyson (1842), Justice Joseph Story construed the phrase “laws of the several states” to include statutes and the law of real property but to exclude “contracts and other instruments of a commercial nature,” which federal courts could construe in the light shed by the “general principles and doctrines of commercial jurisprudence” (p. 19). Story thus called into being a general federal common law in the field of commercial law. His words transformed what had merely been an ambiguity into an enigma.

Standing alone, Swift would not have severely distorted the federal system. But after the Civil War, the notion of a general federal common law underwent a seemingly limitless expansion beyond the commercial law ambit of Swift, extending to municipal bonds, civil procedure, corporations, torts, real property, and workers' compensation. At the same time, the power of the federal courts was expanding exponentially, and federal courts were using doctrines of substantive due process and liberty of contract (see Contract, Freedom of) to annul federal and state economic regulation. Conservatives extolled these substantive developments and the concomitant expansion of federal courts' diversity jurisdiction as vital to the protection of eastern investors' interests in the southern and western states, whereas progressives denounced the resort to federal courts by large corporations seeking to avoid state regulatory policies (see Progressivism). A particularly notorious example of this occurred in the Black & White Taxicab case of 1928, in which federal courts invoked a Swift‐derived “general law” to enable a corporation to avoid state antitrust legislation. Disturbed by such use of federal judicial power, progressives determined to eradicate Swift.

Their opportunity came in Erie, which overruled Swift. Writing for the Court, Justice Louis D. Brandeis declared that “there is no federal general common law” (p. 78). He found Swift to be inconsistent with the intentions of the legislators who drafted the Rules of Decision Act. In an action unique in the history of the Court, Brandeis held one of its decisions, Swift, unconstitutional, presumably as an intrusion on rights reserved to the states by the Tenth Amendment.

Erie did not eliminate the notion of a federal common law, however. On the same day that he handed down his Erie opinion, Brandeis also acknowledged the existence of specialized bodies of federal common law. Nor did Erie resolve the enigma of Swift. Since 1938, the Court has attempted without much success to articulate guidelines that would achieve “the twin aims of the Erie rule: discouragement of forum‐shopping and avoidance of inequitable administration of the laws” (Hanna v. Plummer, 1963, p. 468). Justice William J. Brennan suggested an approach that balances state and federal policy interests (Byrd v. Blue Ridge Rural Electric Cooperative, Inc., 1958), while Chief Justice Earl Warren in Hanna sought to protect the Federal Rules of Civil Procedure from being overridden by state law through use of an analytical algorithm that traces the rules' validity to their statutory source, the Rules Enabling Act of 1934, and then to the Constitution itself. The debate engendered by Swift and Erie will persist as the Court continues to define the contours of judicial federalism in the United States.

See also Federal Common Law; Federalism; Judicial Power and Jurisdiction.

Bibliography

John H. Ely , “The Irrepressible Myth of Erie”, Harvard Law Review 87 (1974): 693–740.
Edward A. Purcell , Brandeis and the Progressive Constitution: Erie, the Judicial Power, and the Politics of the Federal Courts in Twentieth‐century America (2000).

William M. Wiecek

ERIE RAILROAD CO. V. TOMPKINS

A 1938 landmark decision by the Supreme Court, Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188, that held that in an action in a federal court, except as to matters governed by the U.S. Constitution and acts of Congress, the law to be applied in any case is the law of the state in which the federal court is situated.

Harry J. Tompkins was walking on a footpath alongside railroad tracks on land owned by the Erie Railroad Company when he was struck and injured by a passing train. He claimed that his injuries resulted from the negligence of the railroad in operating the train.

Tompkins wanted to sue the railroad and recover monetary damages for his injuries. He was a citizen of Pennsylvania, and the Erie Railroad Company was a New York corporation. He instituted an action in federal court, which was empowered, by virtue of its diversity jurisdiction, to hear the case because the plaintiff and the defendant were citizens of different states.

The issue before the court was what law to apply in deciding the case. The court would have applied a federal statute to decide whether Tompkins was entitled to damages, but none existed. The court would have applied a state statute since there was no federal statute, but Pennsylvania did not have one.

The highest court of Pennsylvania had established a rule to be followed in state courts whenever a case like this occurred. The Pennsylvania rule was that people who use pathways along railroad right-of-ways, not railroad crossings, are trespassers to whom railroads were not to be held liable unless the trespassers were intentionally injured by the reckless and wanton acts of the railroads.

The trial judge refused to apply the Pennsylvania rule. He found that swift v. tyson, 41 U.S. (16 Pet.) 1, 10 L. Ed. 865 (1842), which held that there was a body of federal common law to be applied in such cases, gave federal judges the right to ignore state rules that were not enacted as statutes by their state legislatures. He held that it was more important for all federal courts to follow a uniform rule, rather than for each federal court to apply local state rules when there was no statute to resolve the case. He allowed a jury to decide whether the railroad company was negligent, and the jury returned a verdict of $30,000 for Tompkins.

The Supreme Court reversed the decision and struck down the rule that allowed federal judges to ignore state court decisions in diversity cases. Although this rule had been followed since swift v. tyson was decided in 1842, the Supreme Court ruled that it was inequitable. According to the old rule, Tompkins could obtain monetary damages if he sued in federal court, but not if he initiated his lawsuit a few blocks away in the Pennsylvania state court. If the plaintiff and defendant were citizens of different states, the plaintiff could take advantage of the right to sue in federal court. There the plaintiff might win, even if he or she had been trespassing on railroad property. If the plaintiff and defendant were both citizens of Pennsylvania, the plaintiff could not sue in federal court. Pennsylvania courts would all be bound to follow the rule that prevented recoveries for those who used paths alongside railroad tracks. The Supreme Court held that it was unjust for the plaintiff's chances of winning to depend on the fact that the railroad was a Pennsylvania corporation.

The new rule of erie railroad co. v. tompkins provided that federal courts do not have the power to formulate their own rules of law. The federal courts must apply appropriate federal statutes in diversity cases. When there is no federal law to resolve the question in a lawsuit, they must follow the law of the state that is involved. That includes state statutes and controlling decisions made by the highest court of that state.

As a result of this case, the decisions of federal courts are truly uniform only when a question of federal law is involved. Otherwise, the states are free to develop their own law and have it applied to state questions that come into federal court because the parties are from different states.

further readings

Deeks, Ashley S. 1997. "Raising the Cost of Lying: Rethinking Erie for Judicial Estoppel." University of Chicago Law Review 64 (summer): 873–902.

Timpa, Andrea V. 2002. "There is No Need to Erie-Guess When the Law Is Clear and Unambiguous. Loyola Law Review 48 (fall): 587–613.

cross-references

Diversity of Citizenship.