Erie doctrine
The Erie doctrine is a binding principle requiring federal courts exercising diversity jurisdiction to apply state substantive law and federal procedural law, as defined by the Federal Rules of Civil Procedure.
Pre-Erie Doctrine
The doctrine derives from the landmark U.S. Supreme Court case Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938). The Rules of Decision Act of 1789, now codified at 28 U.S.C. § 1652, provides that “the laws of the several states” shall apply in federal court when jurisdiction is based on diversity of citizenship.
Before Erie, federal courts followed Swift v. Tyson, 41 U.S. 1 (1842), which interpreted “the laws of the several states” to include only state statutes and local customs, not state judicial decisions. As a result, federal courts could disregard state common law and apply what they considered to be the “true” general common law. In Swift, for example, the Court declined to follow New York precedent on commercial law, asserting instead that “the true result of the commercial law” was a matter of general jurisprudence. The Court viewed this body of law as universal, or “not the law of a single country only, but of the commercial world,” reflecting a natural law concept of a single, discoverable legal truth.
Erie Railroad Co. v. Tompkins
In Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), the Supreme Court overturned Swift and held that “the laws of the several states” include state common law. In Erie, Tompkins had been injured by a passing train while walking along a railroad path in Pennsylvania. Under Pennsylvania common law, Tompkins was a trespasser and could not recover damages, whereas under the general common law he could. The Court rejected the notion of a federal general common law, stating that “there is no federal general common law,” and applied Pennsylvania law to deny recovery.
In his opinion, Justice Brandeis emphasized that the Swift doctrine encouraged forum shopping and resulted in unequal administration of the laws, as litigants could exploit diversity jurisdiction to access more favorable federal interpretations. Brandeis also identified constitutional concerns: permitting federal courts to create substantive law intruded on state sovereignty and violated federalism and separation of powers, since Congress itself lacked authority to create substantive common law in such cases. The Erie decision thus marked a shift from a natural law framework toward legal realism.
Post-Erie Doctrine
While the principle that federal courts must apply the substantive law of the state where they are located seems relatively straightforward, the delineation of substantive law and procedural law is hardly so simple and has presented post-Erie courts with many challenges.
In Sibbach v. Wilson & Co., 312 U.S. 1 (1941), the Court held that ordering a medical examination under the Federal Rules of Civil Procedure was procedural, describing it as part of “the judicial process for enforcing rights and duties recognized by substantive law.” In Guaranty Trust Co. v. York, 326 U.S. 99 (1945), the Court adopted the outcome-determinative test, holding that a state statute of limitations was substantive because disregarding it would “significantly alter the result of the litigation.” The Court reasoned that “the outcome of the litigation in the federal court should be substantially the same… as it would be if tried in a State court.”
Subsequent courts have narrowed this analysis, focusing on whether applying federal procedural law to an issue would determine the outcome in light of its potential impact on forum shopping and the inequitable administration of law, i.e. the aims of the Erie Doctrine. In Hanna v. Plumer, 380 U.S. 460 (1965), the Court held that Federal Rule of Civil Procedure 4(d)(1) governing service of process prevailed over a conflicting Massachusetts rule requiring in-hand service. Because the federal rule was valid under the Rules Enabling Act and was constitutional, it applied; and using it would not have influenced a litigant’s choice of forum.
[Last reviewed in November of 2025 by the Wex Definitions Team]
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