Erie Flow Chart

Is the court sitting in diversity and is the matter clearly substantive?

YES

Is there a direct conflict between state P and federal law, rule or practice? Note: Silence on issue can = conflict.

State law/ practice applies. Erie.

NO

YES Is the federal law/ practice expressed in a statute or FRCP, or is it a matter of judicial practice/custom? Where no federal law on point, always apply Hanna I.

Federal statute or FRCP: Rules Enabling Act Analysis (A) Federal Constitutional: If federal constitution provision applies, it will control regardless of the state law or practice. (B) Federal Statute: If statute is valid (reasonably classified as procedural) and on point, it applies. (C) Federal Rule: FRCP considered “presumptively valid.” Federal rule will control (supremacy clause) unless it is invalid (because Congress lacked power to enact): (1) Rule is unconstitutional (not properly adopted). a. Rule is not within the scope of  REA, i.e. procedural, not clearly substantive. Procedural if deals with the process of litigation; not rights outside of court. b. If rule is “arguably procedural” may apply federal rule, unless conflict with 28 USC 2072(b). (2) Rule abridges, enlarges or modifies a state substantive right. 28 USC 2072(b). a. Does the process change the plaintiff’s legal right to recover; does it make it substantially easier for one party to prevail? b. Ex: Damages, elements of a claim; right to recovery (SoL).

Fed. CL (informal) practice or custom : Rules of Decision Act Analysis

If rule invalid, move to RODA analysis.

(1) Does applying the federal rule contravene the aims of Erie of Erie? ? Hanna I  (a) Would the litigant forum shop on the basis of this rule? (b) Would applying the federal law over state law lead to inequitable administration of the law? Yes to either: Apply state law.  No: Move to step 2. 

(2) Would applying state law determine the outcome? (Forum (Forum selection which is not  outcome determinative is fine.)  Yes: Is it a “close call”? (Byrd) YES: Go to step 3. NO: Apply federal law. Guaranty Trust.  No: Apply federal law. Guaranty Trust.

(3) Byrd Balancing Test: On balance, are the federal interests more compelling than the state interests? (i.e., right to jury tr ial, uniformity and efficient admin. of law, federal independence, etc.)  Yes: Apply FEDERAL law.  No: Apply state law.

Hanna I  Hanna II