Erie R. Co. v. Tompkins

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 later diversity 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 Guaranty Trust Co. v. York (1945). The practice of "forum-shopping" has not ceased choosing a federal court over a state court but "law-shopping" has; that was one 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 in a way that satisfies all members of the judiciary.