Erie Railroad Co. v. Tompkins

A 1938 landmark decision by the Supreme Court, Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188, that held that in an action in a federal court, except as to matters governed by the U.S. Constitution and acts of Congress, the law to be applied in any case is the law of the state in which the federal court is situated.

Harry J. Tompkins was walking on a footpath alongside railroad tracks on land owned by the Erie Railroad Company when he was struck and injured by a passing train. He claimed that his injuries resulted from the NEGLIGENCE of the railroad in operating the train.

Tompkins wanted to sue the railroad and recover monetary damages for his injuries. He was a citizen of Pennsylvania, and the Erie Railroad Company was a New York corporation. He instituted an action in federal court, which was empowered, by virtue of its diversity jurisdiction, to hear the case because the plaintiff and the defendant were citizens of different states.

The issue before the court was what law to apply in deciding the case. The court would have applied a federal statute to decide whether Tompkins was entitled to damages, but none existed. The court would have applied a state statute since there was no federal statute, but Pennsylvania did not have one.

The highest court of Pennsylvania had established a rule to be followed in state courts whenever a case like this occurred. The Pennsylvania rule was that people who use pathways along railroad right-of-ways, not railroad crossings, are trespassers to whom railroads were not to be held liable unless the trespassers were intentionally injured by the reckless and wanton acts of the railroads.

The trial judge refused to apply the Pennsylvania rule. He found that SWIFT V. TYSON, 41 U.S. (16 Pet.) 1, 10 L. Ed. 865 (1842), which held that there was a body of federal COMMON LAW to be applied in such cases, gave federal judges the right to ignore state rules that were not enacted as statutes by their state legislatures. He held that it was more important for all federal courts to follow a uniform rule, rather than for each federal court to apply local state rules when there was no statute to resolve the case. He allowed a jury to decide whether the railroad company was negligent, and the jury returned a verdict of $30,000 for Tompkins.

The Supreme Court reversed the decision and struck down the rule that allowed federal judges to ignore state court decisions in diversity cases. Although this rule had been followed since SWIFT V. TYSON was decided in 1842, the Supreme Court ruled that it was inequitable. According to the old rule, Tompkins could obtain monetary damages if he sued in federal court, but not if he initiated his lawsuit a few blocks away in the Pennsylvania state court. If the plaintiff and defendant were citizens of different states, the plaintiff could take advantage of the right to sue in federal court. There the plaintiff might win, even if he or she had been trespassing on railroad property. If the plaintiff and defendant were both citizens of Pennsylvania, the plaintiff could not sue in federal court. Pennsylvania courts would all be bound to follow the rule that prevented recoveries for those who used paths alongside railroad tracks. The Supreme Court held that it was unjust for the plaintiff's chances of winning to depend on the fact that the railroad was a Pennsylvania corporation.

The new rule of ERIE RAILROAD CO. V. TOMPKINS provided that federal courts do not have the power to formulate their own RULES OF LAW. The federal courts must apply appropriate federal statutes in diversity cases. When there is no federal law to resolve the question in a lawsuit, they must follow the law of the state that is involved. That includes state statutes and controlling decisions made by the highest court of that state.

As a result of this case, the decisions of federal courts are truly uniform only when a question of federal law is involved. Otherwise, the states are free to develop their own law and have it applied to state questions that come into federal court because the parties are from different states.