Erie R. Co. v. Tompkins
Erie R. Co. v. Tompkins profoundly changed the allocation of judicial power 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 made by 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 By allowing federal courts to create general law which superseded state law, the Swift doctrine represented "an unconstitutional assumption of power by the Courts of the United States."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 is a 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 when dealing 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 suit against Erie was tried in federal district court in New York; the jury found that the railroad was negligent and awarded Tompkins $30,000 in damages. The railroad 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 order to 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 locomotives headlight 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 since it 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 it need not deal with the question of whether the judge-made law in Pennsylvania was valid, since questions involving liability are questions of "general law."