Erie Railroad Co. v. Tompkins

1938 U.S. Supreme Court case on diversity jurisdiction

1938 United States Supreme Court case

Erie Railroad Co. v. Tompkins
Supreme Court of the United States
Argued January 31, 1938 Decided April 25, 1938
Full case name	Erie Railroad Company v. Harry J. Tompkins
Citations	304 U.S. 64 (more)58 S. Ct. 817; 82 L. Ed. 1188; 1938 U.S. LEXIS 984; 11 Ohio Op. 246; 114 A.L.R. 1487
Case history
Prior	Judgment for plaintiff, S.D.N.Y.; affirmed, 90 F.2d 603 (2nd. Cir. 1937); cert. granted, 302 U.S. 671 (1937).
Subsequent	On remand, reversed, judgment directed for defendant, 98 F.2d 49 (2nd Cir. 1938)
Holding
Under the Rules of Decision Act, federal district courts in diversity jurisdiction cases must apply state law, including the judicial precedents of states' highest courts, where it does not conflict with federal law. There is no general federal common law. Second Circuit Court of Appeals reversed and remanded.
Court membership
Chief Justice Charles E. Hughes Associate Justices James C. McReynolds · Louis Brandeis Pierce Butler · Harlan F. Stone Owen Roberts · Benjamin N. Cardozo Hugo Black · Stanley F. Reed
Case opinions
Majority	Brandeis, joined by Hughes, Stone, Roberts, Black
Concurrence	Reed
Dissent	Butler, joined by McReynolds
Cardozo took no part in the consideration or decision of the case.
Laws applied
U.S. Const. art. III (implied); Judiciary Act of 1789 § 34 (now 28 U.S.C. § 725); Rules of Decision Act (now 28 U.S.C. § 1652)
This case overturned a previous ruling or rulings
Swift v. Tyson (1842)

Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), was a landmark U.S. Supreme Court decision in which the Court held that the United States does not have a general federal common law and that U.S. federal courts must apply state law, not federal law, to lawsuits between parties from different states that do not involve federal questions. In reaching this holding, the Court overturned almost a century of federal civil procedure case law, and established the foundation of the modern law of diversity jurisdiction.

Although the decision is not widely known among ordinary laypeople, most American lawyers and legal scholars regard Erie as one of the most important decisions in U.S. Supreme Court history. The decision "goes to the heart" of the American system of federalism and the relationship between the U.S. federal government and the states.

Legal background

Under the traditional view of the United States's system of federalism, each U.S. state is a sovereign polity in all aspects other than those the U.S. Constitution commits to the federal government, which has supremacy over the states in those areas. Consequently, each U.S. state has its own courts and legal system governing areas such as property law, contract law, tort law, commercial law, criminal law, and family law. Due to the United States's historical origins in the British Empire, all U.S. states except Louisiana have inherited or adopted the English common law for their legal systems.

Shortly after the Constitution's ratification, Congress passed the Judiciary Act of 1789, which created the U.S. federal court system underneath the U.S. Supreme Court. The Act gave U.S. federal courts diversity jurisdiction, allowing them to hear lawsuits between citizens of different states involving disputes over substantial sums of money, even when no questions of federal law are involved. Section 34 of the Judiciary Act—known as the Rules of Decision Act—provided that federal courts would apply state laws when adjudicating lawsuits between citizens of different states.

The 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.
— Judiciary Act of 1789, section 34 ("Rules of Decision Act") (28 U.S.C. § 1652).

Interpreting the meaning of this statute has been one of the most difficult legal issues in American federal jurisprudence. It provides that U.S. federal courts shall apply state law when hearing cases under diversity jurisdiction. It does not specify, however, whether the phrase "the laws of the several States" means only statutes passed by a state's legislature, or whether it also includes the common law decisions of a state's supreme court.

The U.S. Supreme Court addressed the question in its 1842 decision Swift v. Tyson. In Swift, the Court ruled that the Rules of Decision Act's phrase "laws of the several States" referred only to each state's statutory laws passed by their legislatures, and did not include each state supreme court's interpretation and construction of the English common law. The Court concluded that this allowed U.S. federal courts to create a general American "federal common law" for federal courts that would cover areas such as commercial law. But applying the Court's holding in Swift proved difficult, and American lawyers, judges, and legal scholars became increasingly opposed to it during the late 19th and early 20th centuries.

Case history

class=notpageimage| The incident took place at 41°19′44″N 75°46′39″W / 41.3288°N 75.7776°W / 41.3288; -75.7776.

The incident location, as viewed in 1937 and 2024.

In the early hours of July 27, 1934, Harry Tompkins was walking home along a pathway next to a set of railroad tracks in Hughestown, Pennsylvania. An oncoming train approached and, as it passed, Tompkins was knocked to the ground by an object—apparently an unlatched door—protruding from one of the train cars. Tompkins landed on the railroad tracks, and the train's wheels crushed his right arm. An ambulance took him to a local hospital, where doctors amputated most of his arm.

The train that hit Tompkins was owned and operated by the Erie Railroad Company, and Tompkins sued the company for negligence. Because Tompkins resided in Pennsylvania and Erie Railroad was incorporated in New York, Tompkins invoked diversity jurisdiction and filed his lawsuit in a U.S. federal court, rather than a Pennsylvania or New York state court. The case was tried in the U.S. District Court for the Southern District of New York, with U.S. district judge Samuel Mandelbaum presiding.

At trial, Erie Railroad's lawyers argued that Pennsylvania law should govern Tompkins's negligence claim. The pathway along which Tompkins had been walking when the train struck him was an Erie Railroad right-of-way. Previous decisions of the Supreme Court of Pennsylvania had held that, under Pennsylvania law, a person walking along a railroad's right-of-way was a trespasser to whom the railroad was not liable for negligence unless its negligence was "wanton" or "wilful". Because Tompkins had not alleged that Erie Railroad had been wantonly or willfully negligent, the railroad's lawyers made a motion to dismiss his claim, citing these Pennsylvania cases. Mandelbaum denied the motion, ruling that under Swift v. Tyson Tompkins's claim was governed by federal common law, not Pennsylvania law. The case went to trial, where the jury found Erie Railroad liable for Tompkins's injuries and awarded him $30,000 in damages ($658,705 in 2023).

Erie Railroad appealed the verdict to the U.S. Court of Appeals for the Second Circuit. A panel consisting of U.S. circuit judges Thomas Walter Swan, Martin Thomas Manton, and Learned Hand heard the appeal and ruled in Tompkins's favor, affirming the trial court's verdict. The railroad then appealed to the U.S. Supreme Court, which agreed to hear the case and granted certiorari.

Supreme Court decision

On April 25, 1938, the Supreme Court issued a 6–2 decision in favor of Erie Railroad that overruled Swift v. Tyson and held that U.S. federal courts must apply state law, not general "federal common law", when adjudicating claims in lawsuits between citizens of different U.S. states.

Opinion of the Court

Justice Louis Brandeis, the author of the majority opinion in *Erie*

For the purposes of the decision's core holding, six justices formed the majority and joined an opinion written by justice Louis Brandeis.

The Court began by framing the case around the question of "whether the oft-challenged doctrine of Swift v. Tyson shall now be disapproved." The Court first reviewed the history of the Swift doctrine. It referenced the research of American legal scholar Charles Warren, who in a 1923 Harvard Law Review article had published evidence of an earlier draft of the Rules of Decision Act that explicitly included states' common laws in its definition of "the laws of the several states". The Court concluded that Warren's discovery proved that the Swift Court's interpretation of the Act had been "erroneous".

The Court next explained that the Swift doctrine had not produced the legal uniformity the Court had hoped it would, but had instead allowed litigants from other states to discriminate against other litigants in their home states. The Court said that because the Swift doctrine dictated that a lawsuit between two in-state parties would be decided under state law while an identical lawsuit between an in-state party and an out-of-state party would be decided under federal common law, the Swift doctrine was allowing plaintiffs to manipulate which law would be applied to their lawsuits by strategically filing them in specific state or federal courts—a practice now known as "forum shopping". The Court decried this practice, saying that it allowed plaintiffs to introduce "grave discrimination" against parties from other states.

Furthermore, the Court held that the Swift doctrine had not only been a "social and political" failure, but had also been unconstitutional—though the opinion did not explain how.

If only a question of statutory construction were involved, we should not be prepared to abandon a doctrine so widely applied throughout nearly a century. But the unconstitutionality of the course pursued has now been made clear, and compels us to do so.
— Erie, 304 U.S. at 77–78.

Having determined that the Swift doctrine was unconstitutional, the opinion's third section declared that there is no general U.S. federal common law, and that U.S. federal courts hearing cases under diversity-of-citizenship jurisdiction must apply state laws as construed by state supreme courts.

Except in matters governed by the Federal Constitution or by Acts of Congress, the law to be applied in any case is the law of the State. And whether the law of the State shall be declared by its Legislature in a statute or by its highest court in a decision is not a matter of federal concern. There is no federal general common law. Congress has no power to declare substantive rules of common law applicable in a State, whether they be local in their nature or "general," be they commercial law or a part of the law of torts. And no clause in the Constitution purports to confer such a power upon the federal courts.
— Erie, 304 U.S. at 78.

The Court emphasized that its ruling was not meant to strike down any federal laws, but was only intended to "declare that in applying the doctrine this Court and the lower courts have invaded rights which in our opinion are reserved by the Constitution to the several States."

Applying its holding to the facts of Tompkins's case, the Court held that both the district court and the Second Circuit had erred by not applying Pennsylvania law to Tompkins's claim against Erie Railroad. The Court reversed the Second Circuit's decision and remanded the case, instructing the court to determine whether the railroad company's interpretation of Pennsylvania law had been correct.

Reed's concurrence in the judgment

Justice Stanley F. Reed concurred only in the judgment. Reed agreed with the Court's core holding that Swift v. Tyson should be overruled and that federal courts should apply state law when deciding cases under diversity jurisdiction. Reed disagreed with the Court's conclusion that the Swift doctrine was unconstitutional, however, saying instead it had been merely an erroneous interpretation of the Rules of Decision Act.

Butler's dissent

Justice Pierce Butler filed a dissenting opinion, joined by Justice James McReynolds, in which he argued the majority had engaged in judicial activism. He asserted the majority had completely rewritten the two questions presented in the petition for certiorari as a constitutional question, when there really was no constitutional issue. He pointed out that no one in this case had directly challenged the Swift regime, which the Court had adhered to for so long in so many cases.

Aftermath

On remand, the three Second Circuit judges determined that Erie Railroad's characterization of Pennsylvania law—that a person walking along a railroad right of way was a trespasser to whom the railroad was not liable for negligence unless the negligence was "wanton" or "wilful"—had been correct. The judges concluded that Tompkins had neither alleged nor shown any evidence that Erie Railroad's negligence had been "wanton", and they therefore held that Erie Railroad was entitled to a directed verdict. This forced the district court to enter a new judgment in favor of Erie Railroad. Tompkins lost his $30,000 damages award and received nothing.

Subsequent jurisprudence

Main article: Erie doctrine

Later opinions limited the application of Erie to substantive state law; federal courts can generally use the Federal Rules of Civil Procedure while hearing state law claims.

It can be a problem for federal courts to know what a state court would decide on an issue of first impression (i.e., one not previously considered by state courts). In such circumstances, federal courts engage in what is informally called an "Erie guess." This "guess," actually a carefully reasoned attempt to anticipate what the state's courts would decide, is not binding on state courts themselves, which may adopt the federal court's reasoning if and when the issue reaches them in some other case, or may decide the issue differently. In the latter case, future federal courts would be required to follow the state's precedents, although a final judgment in the "guessed" case would not be reopened.

Alternatively, federal courts can certify questions to a state supreme court, so long as the state itself has a procedure in place to allow this. For example, some federal district (trial) courts can certify questions to state supreme courts, but other states allow only federal courts of appeal (circuit) courts to do so. In the latter situation, an Erie guess would be the only option available for the federal court attempting to apply state law.

Erie Railroad is considered one of the major examples where the Supreme Court has exceptionally gone against the principle of party presentation, as neither party had suggested a need to review Swift but the Court took it up themselves to review and ultimately overturn it.

References

Footnotes

The statute originally read "shall be regarded as rules of decision in trials at common law ...." Congress changed the phrase "trials at common law" to "civil actions" in 1948.
Due to poor health, justice Benjamin Cardozo did not sit for oral argument or participate in the Court's decision.
Justice Stanley F. Reed concurred in the Court's core holdings that Swift v. Tyson should be overruled and that federal courts adjudicating state-law claims under diversity jurisdiction must apply state law rather than "general" federal common law, although he did not join the Court's holding that the Swift doctrine was unconstitutional.
Justice Stanley F. Reed did not join the Court's conclusion that Swift v. Tyson had been unconstitutional, making the Court's holding on that point 5–3, not 6–2.

Citations

^ Wright & Kane (2017), § 55, p. 340.
Young (2013), p. 18.
Zeigler (1964), pp. 469–71.
Hall (1951), p. 815.
An Act to Establish the Judicial Courts of the United States, ch. 20, § 34, 1 Stat. 73, 92 (1789).
Wright & Kane (2017), § 54, p. 333, note 2.
Wright & Kane (2017), § 54, p. 333.
Wright & Kane (2017), § 54, pp. 333–34.
Wright & Kane (2017), § 54, p. 334–36.
^ Frye, Brian (January 1, 2018). "The Ballad of Harry James Tompkins". Akron Law Review. 52: 531.
Younger (1978), pp. 1012–13.
^ Wright & Kane (2017), § 55, p. 338.
Younger (1978), pp. 1017–18.
Younger (1978), pp. 1020–21, 1031.
^ Younger (1978), p. 1021.
Younger (1978), pp. 1013–14, 1016–24.
Wright & Kane (2017), § 55, p. 338, quoting Erie, 304 U.S. at 69.
Wright & Kane (2017), § 55, pp. 338–39, quoting Erie, 304 U.S. at 72.
^ Wright & Kane (2017), § 55, p. 339.
Chemerinsky (2021), § 5.3, p. 363.
Chemerinsky (2021), § 5.3, p. 363, quoting Erie, 304 U.S. at 74.
Clark (2007), pp. 1295–96.
Quoted in Wright & Kane (2017), § 55, p. 339.
Quoted in Wright & Kane (2017), § 55, p. 339.
Wright & Kane (2017), § 55, p. 339, quoting Erie, 304 U.S. at 79–80.
Younger (1978), p. 1028.
^ Younger (1978), pp. 1028–29.
Frost, Amanda (2009). "The Limits of Advocacy". Duke Law Journal. 59 (3): 447–518.

Works cited

Chemerinsky, Erwin (2021). Federal Jurisdiction (8th ed.). New York: Wolters Kluwer. ISBN 978-1-5438-1371-5.
Clark, Bradford R. (2007). "Erie's Constitutional Source". California Law Review. 95 (Special Issue): 1289–1312.
Hall, Ford W. (1951). "The Common Law: An Account of Its Reception in the United States". Vanderbilt Law Review. 4 (4): 791–825.
Wright, Charles Alan; Kane, Mary Kay (2017). Law of Federal Courts (8th ed.). St. Paul, Minnesota: West Academic Publishing. ISBN 978-0314290373.
Young, Ernest A. (2013). "A General Defense of Erie Railroad Co. v. Tompkins". Journal of Law, Economics & Policy. 10 (1): 17–124.
Younger, Irving (1978). "What Happened in Erie". Texas Law Review. 56: 1011–31.
Zeigler, Eugene N. (1964). "The Background of Erie". South Carolina Law Review. 17 (4): 468–79.

External links

Text of Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938) is available from: Findlaw Google Scholar Justia
Summary of Erie Railroad Co. v. Tompkins

U.S. Supreme Court Article III case law

Federalism

Abstention	Railroad Commission v. Pullman Co. (1941) Burford v. Sun Oil Co. (1943) Louisiana Power & Light Co. v. City of Thibodaux (1959) United Gas Pipe Line Co. v. Ideal Cement Co. (1962) England v. Louisiana State Board of Medical Examiners (1964) Younger v. Harris (1971) Colorado River Water Conservation District v. United States (1976) Moses H. Cone Memorial Hospital v. Mercury Construction Corp. (1983)
Adequate and independent state ground	Murdock v. City of Memphis (1875) Seneca Nation of Indians v. Christy (1896) Fox Film Corp. v. Muller (1935) Harrison v. NAACP (1959) Michigan v. Long (1983)
Federal common law	United States v. Hudson (1812) Swift v. Tyson (1842) Black & White Taxicab & Transfer Co. v. Brown & Yellow Taxicab & Transfer Co. (1928) Erie Railroad Co. v. Tompkins (1938) Hinderlider v. La Plata River & Cherry Creek Ditch Co. (1938) Clearfield Trust Co. v. United States (1943)
Rooker–Feldman doctrine	Rooker v. Fidelity Trust Co. (1923) District of Columbia Court of Appeals v. Feldman (1983) Exxon Mobil Corp. v. Saudi Basic Industries Corp. (2005)
Sovereign immunity and presidential immunity	Little v. Barreme (1804) The Schooner Exchange v. M'Faddon (1812) Mississippi v. Johnson (1867) United States v. Lee (1882) Schillinger v. United States (1894) Feres v. United States (1950) United States v. Wunderlich (1951) Banco Nacional de Cuba v. Sabbatino (1964) Santa Clara Pueblo v. Martinez (1978) Nixon v. Fitzgerald (1982) United States v. Stanley (1987) Oklahoma Tax Commission v. Citizen Band, Potawatomi Indian Tribe of Oklahoma (1991) Saudi Arabia v. Nelson (1993) Clinton v. Jones (1997) Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc. (1998) College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board (1999) C & L Enterprises, Inc. v. Citizen Band, Potawatomi Indian Tribe of Oklahoma (2001) Inyo County v. Paiute-Shoshone Indians of the Bishop Community (2003) United States v. White Mountain Apache Tribe (2003) Republic of Austria v. Altmann (2004) City of Sherrill v. Oneida Indian Nation of New York (2005) Dolan v. United States Postal Service (2006) Permanent Mission of India v. City of New York (2007) Ali v. Federal Bureau of Prisons (2008) Samantar v. Yousuf (2010) United States v. Bormes (2012) Republic of Argentina v. NML Capital, Ltd. (2014) OBB Personenverkehr AG v. Sachs (2015) Jam v. International Finance Corp. (2019) Republic of Sudan v. Harrison (2019) Opati v. Republic of Sudan (2020) Trump v. United States (2024)

Jurisdiction

Chisholm v. Georgia (1793)
Marbury v. Madison (1803)
United States v. More (1805)
Martin v. Hunter's Lessee (1816)
American Insurance Co. v. 356 Bales of Cotton (1828)
Sheldon v. Sill (1850)
United States v. Jackalow (1862)
Ex parte Vallandigham (1864)
Ex parte McCardle (1869)
United States v. Klein (1871)
City of St. Louis v. Myers (1885)
Barrett v. United States (1898)
Burton v. United States I (1905)
Burton v. United States II (1906)
Louisville & Nashville Railroad Co. v. Mottley (1908)
Muskrat v. United States (1911)
American Well Works Co. v. Layne & Bowler Co. (1916)
Smith v. Kansas City Title & Trust Co. (1921)
Hartsville Oil Mill v. United States (1926)
Wisconsin v. Illinois (1929)
Crowell v. Benson (1932)
Colegrove v. Green (1946)
Glidden Co. v. Zdanok (1962)
Oneida Indian Nation of New York v. County of Oneida (1974)
Arizona v. New Mexico (1976)
Mt. Healthy City School District Board of Education v. Doyle (1977)
Northern Pipeline Construction Co. v. Marathon Pipe Line Co. (1982)
Thomas v. Union Carbide (1985)
Commodity Futures Trading Commission v. Schor (1986)
Merrell Dow Pharmaceuticals Inc. v. Thompson (1986)
Plaut v. Spendthrift Farm, Inc. (1995)
JPMorgan Chase Bank v. Traffic Stream (BVI) Infrastructure Ltd. (2002)
Grable & Sons Metal Products, Inc. v. Darue Engineering & Mfg. (2005)
Bowles v. Russell (2007)
Patchak v. Zinke (2018)

Justiciability

Mootness	DeFunis v. Odegaard (1974) Campbell-Ewald Co. v. Gomez (2016) Uzuegbunam v. Preczewski (2021) Acheson Hotels, LLC v. Laufer (2023)
Political question	Baker v. Carr (1962) Goldwater v. Carter (1979) Nixon v. United States (1993)
Ripeness	Poe v. Ullman (1961) Toilet Goods Ass'n, Inc. v. Gardner (1967) Laird v. Tatum (1972) Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City (1985) Trump v. New York (2020)
Standing	Bailiff v. Tipping (1805) Fairchild v. Hughes (1922) Massachusetts v. Mellon (1923) Ex parte Levitt (1937) Altvater v. Freeman (1943) Flast v. Cohen (1968) Sierra Club v. Morton (1972) United States v. Students Challenging Regulatory Agency Procedures (1973) Schlesinger v. Reservists Committee to Stop the War (1974) Warth v. Seldin (1975) Illinois Brick Co. v. Illinois (1977) Pfizer Inc. v. Government of India (1978) Valley Forge Christian College v. Americans United for Separation of Church & State (1982) City of Los Angeles v. Lyons (1983) Allen v. Wright (1984) Diamond v. Charles (1986) Lujan v. Defenders of Wildlife (1992) Raines v. Byrd (1997) FEC v. Akins (1998) Friends of the Earth, Inc. v. Laidlaw Environmental Services, Inc. (2000) DaimlerChrysler Corp. v. Cuno (2006) Hein v. Freedom From Religion Foundation (2007) Massachusetts v. Environmental Protection Agency (2007) Arizona Christian School Tuition Organization v. Winn (2011) Bond v. United States (2011) Clapper v. Amnesty International USA (2013) Spokeo, Inc. v. Robins (2016) Texas v. Pennsylvania (2020) Trump v. New York (2020) Uzuegbunam v. Preczewski (2021) TransUnion LLC v. Ramirez (2021) Biden v. Nebraska (2023) FDA v. Alliance for Hippocratic Medicine (2024) Murthy v. Missouri (2024)
Others	Hayburn's Case (1792) County of Oneida v. Oneida Indian Nation of New York State (1985) Davis v. Bandemer (1986) Vieth v. Jubelirer (2004) Rucho v. Common Cause / Benisek v. Lamone (2019)

Treason
Ex parte Bollman (1807) United States v. Burr (1807) Cramer v. United States (1945)

Others
Stuart v. Laird (1803) Osborn v. Bank of the United States (1824) Forrester v. White (1988) Mistretta v. United States (1989) Peretz v. United States (1991) United States v. Hatter (2001) Stern v. Marshall (2011) Bank Markazi v. Peterson (2016)

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