Erie Doctrine

The Erie doctrine is the rule that federal courts in the United States, when hearing a case based on diversity jurisdiction rather than a federal question, must apply the substantive law of the state whose law governs the dispute rather than fashion a federal common law rule of their own. It comes from the 1938 decision of the Supreme Court in Erie Railroad Co. v. Tompkins, which overturned the older rule from Swift v. Tyson that had let federal judges disregard the rulings of state courts on so-called general questions of law. Under Erie, a federal court looks first to see whether state law clearly governs the issue, and if it does not, predicts how the highest court of that state would decide the question, an exercise sometimes called an Erie guess. The doctrine was meant to stop the same case from coming out differently depending only on whether it was filed in state or federal court, ending what had become a dual system of law and discouraging plaintiffs from picking a federal forum purely to get a more favorable rule.