Erie Doctrine

The Erie doctrine is a fundamental legal doctrine of civil procedure in the United States which mandates that a federal court sitting in diversity jurisdiction (or in general, when hearing state law claims in contexts like supplemental jurisdiction or adversarial proceedings in bankruptcy) must apply state substantive law to resolve claims under state law.

The doctrine follows from the Supreme Court landmark decision in Erie Railroad Co. v. Tompkins (1938). The case overturned Swift v. Tyson, which allowed federal judges sitting in a state to ignore the common law local decisions of state courts in the same state, in cases based on diversity jurisdiction.

There are two main objectives of the Erie decision: (1) to discourage forum shopping among litigants, and (2) to avoid inequitable administration of the laws. Broadly speaking, the second objective is sometimes referred to as "vertical uniformity" and is rooted in the idea that in a given state, the outcome of the litigation should not be grossly different just because a litigant filed a claim in a state court rather than a federal court or vice versa.

The Erie doctrine today applies regardless of how the federal court may hear a state claim. Whether the federal court encounters a state law issue in diversity jurisdiction, supplemental jurisdiction, or bankruptcy jurisdiction, the federal court must honor state common law when deciding state law issues.

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