Oral argument: Nov. 2, 2009
Appealed from: United States Court of Appeals for the Second Circuit (Nov. 19, 2008)
FEDERAL COURTS, ERIE DOCTRINE, CLASS ACTIONS, CHOICE OF LAW
Shady Grove Orthopedic Associates filed a class action lawsuit in federal court, arguing that Allstate Insurance Company violated New York law in failing to pay interest to policyholders. The district court dismissed the case on the grounds that New York law prevented a class action lawsuit in this context, and the Second Circuit affirmed. This case concerns the application of state law in federal court under the Erie Doctrine, particularly whether New York class action law applies in federal court and whether it conflicts with Rule 23 of the Federal Rules of Civil Procedure. Shady Grove argues that Rule 23 is the comprehensive class action rule for federal courts, and that New York law cannot undermine federal court procedure. Allstate claims that state law applies because plaintiffs would have different rights in state and federal court. The case will address Rule 23 and the ability of states to restrict class action lawsuits.
