Define: Erie/Klaxon Doctrine

The Erie/Klaxon Doctrine is a legal principle that determines which state’s law should be applied in federal diversity cases. It is based on two landmark cases, Erie Railroad Co. v. Tompkins and Klaxon Co. v. Stentor Electric Manufacturing Co.

In the Erie Railroad Co. v. Tompkins case, the U.S. Supreme Court held that federal courts sitting in diversity must apply state substantive law, rather than federal common law. This decision overturned the previous Swift v. Tyson ruling, which allowed federal courts to create their own common law in diversity cases.

The Klaxon Co. v. Stentor Electric Manufacturing Co. case established the “choice of law” rule, which requires federal courts to apply the choice of law rules of the state in which they sit. This means that federal courts must apply the forum state’s choice of law rules to determine which state’s law should be applied.

The Erie/Klaxon Doctrine requires federal courts to apply the substantive law of the state in which they sit, as determined by the choice of law rules of that state. This ensures that state law governs the outcome of diversity cases, rather than federal common law.

No, the Erie/Klaxon Doctrine only applies to federal diversity cases. Federal question cases involve disputes arising under federal law, and federal courts have the authority to apply federal law in those cases.

No, under the Erie/Klaxon Doctrine, federal courts must apply the substantive law of the state in which they sit. They cannot choose to apply the law of a different state, even if it may be more favorable to one of the parties.

Yes, there are limited exceptions to the Erie/Klaxon Doctrine. For example, federal courts may apply federal common law in certain areas where there is a significant federal interest, such as admiralty and bankruptcy law.

The Erie/Klaxon Doctrine aims to promote predictability by ensuring that state law governs diversity cases. This means that parties can reasonably anticipate the application of a particular state’s law, rather than facing uncertainty due to the potential creation of federal common law.

No, the Erie/Klaxon Doctrine is a constitutional principle that cannot be overridden by a federal statute. It is based on the Supremacy Clause of the U.S. Constitution, which establishes that federal law is supreme over state law.

Under the Erie/Klaxon Doctrine, federal courts must apply state law as it is interpreted by the highest court of the state. This means that federal courts do not have the authority to create or modify state law, but rather must follow the state court’s interpretation.