Academic journal article Northwestern University Law Review

ERIE'S INTERNATIONAL EFFECT[dagger]

Academic journal article Northwestern University Law Review

ERIE'S INTERNATIONAL EFFECT[dagger]

Article excerpt

ABSTRACT-To what extent does the Erie doctrine apply in an international context? In his article When Erie Goes International, Professor Childress argues that a federal court choosing between state law and the law of a foreign nation should often (or perhaps always) ignore Klaxon Co. v. Stentor Electric Manufacturing Co. and use federal choice of law rules rather than the rules of the state where the federal court is located.

In this Essay, I have three points to make in response. The first is that Childress's article, even if successful, leaves the bulk of the Erie doctrine unchanged in an international context. His arguments are directed solely to Klaxon and choice of law. The second point is that most of his arguments fail to give us a reason to question Klaxon's applicability in an international context. The only argument that has any success is based on the idea that the choice between state and foreign law implicates federal interests in foreign relations. The third point is that even this argument has only very limited success. Federal interests in foreign relations will rarely override Klaxon's command.

In his important article, When Erie Goes International, Professor Childress addresses the marvelous question of the Erie doctrine's application in an international context.1 In particular, Childress argues that Klaxon Co. v. Stentor Electric Manufacturing Co.,2 which held that a federal court sitting in diversity (or alienage) must borrow the choice of law rules of the state where the federal court is located, should not apply when the federal court chooses between state law and the law of a foreign nation.3 In this Essay, I have three points to make in response-one clarificatory and two critical.

The clarificatory point is that even if Childress is correct, the bulk of the Erie doctrine applies unchanged in international cases. Childress's arguments are directed solely to Klaxon and international choice of law. The first critical point concerns the merits of Childress's arguments, all but one of which give us no reason to think that Klaxon should be abandoned in international cases. The one argument that has any success is that a choice between state and foreign law implicates federal interests in foreign relations, in particular comity with foreign nations. These federal interests can indeed override Klaxon's command. But this brings me to my second critical point: Childress exaggerates the extent to which these federal interests will displace Klaxon. Whereas he thinks that federal law will preempt much-or perhaps all-state law on international choice of law, I argue that preemption will be rare.

I. MOST OF ERIE STILL APPLIES IN AN INTERNATIONAL CONTEXT EVEN IF CHILDRESS'S ARGUMENTS SUCCEED

Even if the arguments in Childress's article succeed, their effect is relatively narrow. Most of the Erie doctrine still applies in an international context. To see why, consider an international Erie Railroad v. Tompkins.4 In the original Erie, Tompkins, a Pennsylvania domiciliary, was struck by something protruding from one of Erie's trains-probably an open door- while trespassing on Erie's property in Pennsylvania. He sued Erie, a domiciliary of New York, in federal court in New York.5 For our international Erie case, imagine that the accident had happened in Ontario, Canada, or that Tompkins or Erie (or both) had been a domiciliary of Ontario when the accident in Pennsylvania occurred.6

Erie stands, in part, for the principle that diversity jurisdiction does not give a federal court the power to make federal common law that displaces the state law right upon which the plaintiff sues.7 The scope of federal courts' power to make common law is a contested matter,8 but at the very least it requires the presence of some federal regulatory interest, not just jurisdiction.9 Childress concedes that this core constitutional principle of Erie applies in international cases. He does not suggest that the federal court entertaining our international Erie case would have the power to make a federal common law rule governing Erie's duty of care to Tompkins merely because one or both of the parties is a foreign domiciliary or because the event being litigated occurred abroad. …

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