Erie R. Co. v. Tompkins

Petitioner
Erie Railroad Company
Respondent
Tompkins
Petitioner's Claim
That state law, rather than federal court decisions, should determine whetherthe railroad was liable for injuries Tompkins suffered when walking along the railroad's right-of-way.
Chief Lawyer for Petitioner
Theodore Kiendl
Chief Lawyer for Respondent
Fred H. Rees
Justices for the Court
Hugo Lafayette Black, Louis D. Brandeis (writing for the Court), Charles Evans Hughes, Owen Josephus Roberts, Harlan Fiske Stone, Stanley Forman Reed
Justices Dissenting
Pierce Butler, James Clark McReynolds (Benjamin N. Cardozo did not participate)
Place
Washington, D.C.
Date of Decision
25 April 1938
Decision
The U.S. Supreme Court upheld the petitioner's claim and reversed the circuitcourt of appeal's validation of the trial jury's award of damages.
Significance
Erie R. Co. v. Tompkins profoundly changed the allocation of judicialpower between state and federal courts. The majority opinion settled a long-standing controversy about the validity of states' common (judge-made) law in"diversity of citizenship" cases in which the citizen of one state sues the citizen of another in federal court. The Court rejected the doctrine established in Swift v. Tyson (1842) that federal judges could ignore law madeby state judges because the Judiciary Act of 1789 did not consider judges' decisions to be law. By allowing federal courts to create general law which superseded state law, the Swift doctrine represented "an unconstitutional assumption of power by the Courts of the United States." This case elevated states'judge-made law to the status of laws made by state legislatures, and was a victory for states' rights, in the literal sense of the term.
Erie R. Co. v. Tompkins is a multi-layered case. On the surface, it isa claim for damages against a railroad by a plaintiff in Pennsylvania who was hit by a moving train's open boxcar door. At another level, the case involves widespread and growing confusion about the power federal judges have whendealing in federal courts with "diversity of citizenship" cases, in which a citizen of one state sues a citizen of another. The Supreme Court used this case as an occasion to clarify the situation by holding unconstitutional a 96-year-old doctrine of a case presented before a former Court, Swift v. Tyson.
Tompkins was a citizen of Pennsylvania. Erie Railroad Company was a corporation chartered in New York, and therefore a New York "citizen." Tompkins's suitagainst Erie was tried in federal district court in New York; the jury foundthat the railroad was negligent and awarded Tompkins $30,000 in damages. Therailroad appealed to a federal court of appeals, and lost again. The railroad then asked the U.S. Supreme Court for a writ of certiorari an orderto a lower court to send up the record of a case, usually issued when the higher court decides that the case involves "a substantial federal question."
Erie Railroad's request posed two questions. First, should its liability toward Tompkins have been determined by Pennsylvania law, even thought the law had been made by judges rather than by the state legislature? Second, did the evidence not show conclusively that Tompkins had contributed to the accident by failing to heed the moving train's warnings, consisting of the locomotivesheadlight and horn? Tompkins argued that the long-standing rules of the Supreme Court held that issues involving negligence were to be determined by federal judges reading of general law, which was higher than local law.
The notion that general law existed had been the Supreme Court's guide sinceit was invoked by Justice Joseph Story in the 1842 case Swift v. Tyson. In interpreting Section 34 of the Judiciary Act of 1789, Justice Story said, "In the ordinary use of language, it will hardly be contended, that the decisions of courts constitute laws. They are, at most, only evidence of what the laws are, and are not, of themselves laws . . . The laws of a state are more usually understood to mean the rules and enactments promulgated by the legislative authority thereof, . . . " He added, "The interpretation and effect of contracts and other instruments of a commercial nature are to be sought . .. in the general principles and doctrines of commercial jurisprudence."
In its review of the original case, the Circuit Court of Appeals held that itneed not deal with the question of whether the judge-made law in Pennsylvania was valid, since questions involving liability are questions of "general law."
The Court Changes Course
On a 6-2 vote, the U.S. Supreme Court held that the Circuit Court of Appealswas in error in its view that there was such a thing as "general law", and sent the case back for further review. More significantly, it held that the doctrine of Swift v. Tyson was "an unconstitutional assumption of powers"by federal courts, and said, in a strikingly clear sentence, "There is no federal general common law."
Writing for the majority, Justice Brandeis began by announcing that the question was, should the "oft-challenged" doctrine of Swift v. Tyson be "disapproved"? The answer was yes, for three reasons.
First, because of Swift v. Tyson's interpretation of section 34 of theJudiciary Act of 1789, federal courts had assumed a power that even Congresscould not have given them. Brandeis cited eight law review articles writtenbetween 1873 and 1917 questioning that interpretation, and then accepted as authoritative a law professor's 1923 research finding in the Harvard Law Review that the original intent of section 34 was to ensure that federal courts followed the laws of the state, "unwritten as well as written."
Citing nine law review articles written between 1928 and 1935, Brandeis thennoted that criticism of the doctrine had increased after the 1928 so-called Taxicab cases, in which a Kentucky cab company reincorporated in Tennessee inorder to win a case in federal court that it could not have won as a Kentuckycitizen in a Kentucky state court.
Second, Swift v. Tyson had created much confusion. Instead of increasing uniformity in the development of common law, state courts were decreasingit by continuing to issue their own opinions on questions of common law. Further, there was no clear line between cases that belonged to "general law" andto state law. Brandeis observed that as of 1937, there had already been nearly 1,000 lower court decisions trying to find the distinction between the twokinds of law.
Worse, Swift v. Tyson created injustices. It effectively nullified equal protection of the law, since citizens could win in federal courts cases they could not win in state courts, merely by moving from one state to another,or, in the case of corporations, by reincorporating in a different state, without even moving. In this way, "noncitizens" had more power than "citizens"in diversity of citizenship cases. Further, federal courts kept expanding thelist of legal topics included under "general law," which meant that the effects of "grave discrimination" by noncitizens against citizens was now far-reaching.
Justice Brandeis's third reason for concluding that the doctrine of Swiftv. Tyson was unconstitutional was that it "is an invasion of the authority of the state, and, to that extent, a denial of its independence." Interestingly, Brandeis was quoting from an 1892 dissent by Justice Field. Brandeis said clearly that the law to be applied in diversity of citizenship cases is the law of the state, and that whether the law is made by the state's legislature or by its judges "is not a matter of federal concern." He flatly stated that "[t]here is no federal general common law." Congress has no power to declare substantive rules of common law in states and nowhere does the Constitution give such power to the federal courts. He then cited Justice Oliver WendellHolmes dissenting opinion in the 1928 Taxicab cases to the effect that "[t]he authority and only authority is the State, and . . . the voice adopted by the State as its own . . . should utter the last word." Curiously, in rejecting the concept of "federal general common law," he did not mention Justice Holmes's famous characterization of that concept in Southern Pacific Co. v. Jensen (1917) as a "brooding omnipresence in the sky."
With this ruling, the Court invalidated the doctrine of Swift v. Tyson; it did not reverse the case, as such. Nor, as Brandeis pointed out, did hisopinion hold unconstitutional section 34 of the Federal Judiciary Act of 1789. "We merely declare," he concluded, that the doctrine's use by the SupremeCourt and lower federal courts has "invaded rights which are . . . reserved by the Constitution to the several states."
A "Radical Change"
In his dissent, Justice Butler, joined by Justice McReynolds, argued that themajority has held unconstitutional the Judiciary Act of 1789, "and especially section 34." He also argued that federal courts now have to adhere to statecourt decisions, and that Congress is now powerless to remedy the situation."It is," he said, "hard to foresee the consequences of the radical change somade."
He also argued that it was not necessary for the Court to consider "any" constitutional question in this case, but since, as he understood the majority opinion, it had invalidated the Judiciary Act of 1789, then the Court was required by law to allow the U.S. attorney general to present arguments on behalfof the act's constitutionality. For that matter, he added, Congress would have to be consulted as well.
Butler agreed that the lower court's judgment should be reversed, not for theconstitutional reasons given by the majority but because Tompkins's own negligence contributed to his injuries.
Justice Reed concurred with the majority opinion but would have preferred theCourt to say "the course pursued" by federal courts based on the doctrine ofSwift v. Tyson was "merely erroneous," rather than "unconstitutional."
Impact
By dismissing the concept of federal general common law and by putting law made by state judges on equal footing with law made by state legislatures, Erie R. Co. v. Tompkins reduced the power of federal courts in diversity of citizenship cases and greatly enhanced the power of state courts. In laterdiversity of citizenship decisions, the "policy" established by the Erie case came to stand for two things: it discouraged "forum-shopping" and discouraged unequal administration of the laws. Diversity of citizenship cases continue, but federal courts hearing them are now, "in effect, only another court of the State" whose law determines the outcome, according to GuarantyTrust Co. v. York (1945). The practice of "forum-shopping" has not ceasedchoosing a federal court over a state court but "law-shopping" has; that wasone of Erie R. Co. v. Tompkins main points.
Twenty-five years after Erie, Justice Harlan in Hanna v. Plumer(1965) said that Erie and the cases following it have not stated "a workable doctrine." One question raised by the decision regards whether Erie meant that congressionally established federal rules of procedure had to give way to state law? The answer to this question has not been provided ina way that satisfies all members of the judiciary.
Related Cases

• Swift v. Tyson, 41 U.S. 1 (1842).
  
• Southern Pacific Co. v Jensen, 244 U.S. 205 (1917).
  
• Ragan v. Merchants Transfer & Warehouse Co., 337 U.S. 530 (1949).
  
• Hanna v. Plumer, 380 U.S. 460 (1965).