Tompkins (PA) was injured by a passing train of Erie Railroad (NY corporation).
P brought an action in the federal court for SDNY.
Erie contended that its liability should be determined in accordance with PA law.
Tompkins contended that since there was no statute of the state on the subject, liability should be determined in federal courts as a matter of general law.
Procedural History:
District court ruled for P, federal common law applicable.
COA affirmed, federal common law applicable.
SCOTUS reversed and remanded, state law applicable.
Issues:
Should federal courts sitting diversity apply state law or federal common law?
Holding/Rule:
Under the Rules of Decision Act, federal district courts in diversity jurisdiction cases must apply the law of the states in which they sit, including the judicial doctrine of the state's highest court, where it does not conflict with federal law. There is no general federal common law.
Reasoning:
Applying the doctrine of Swift was pretty terrible; persistence of state courts in their own opinions on questions of common law prevented uniformity, and the impossibility of discovering a satisfactory line between the province of general law and that of local law developed much uncertainty.
Swift introduced grave discrimination by non-citizens against citizens and rendered impossible equal protection of the law since non-citizens had the right of selecting the court. This is unconstitutional.
Dissent:
This case required only a different interpretation of section 34, not the decree that federal courts were being unconstitutional for the past 100 years.
