Shedding Light on Shady Grove: Further Reflections on the Erie Doctrine from a Conflicts Perspective
Bauer, Joseph P., Notre Dame Law Review
As is well known, the "Erie (1) doctrine" broadly involves questions of vertical choice of law: what law should be applied in a federal court when the underlying claim arises under state law? (2) In an article that appeared in this journal twelve years ago, (3) I argued that many of the goals embodied in that doctrine would be advanced if learning from the field of horizontal conflicts of law--determining which of the conflicting rules of two or more states or countries should govern--were applied to Erie analysis. (4)
In this Article, I propose to reexamine some of those issues in light of intervening case law, academic criticism, and, in particular, the Supreme Court's recently decided case, Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co. (5) For the most part, the suggestions in that 1999 article are consistent with the dissent's conclusions in Shady Grove. Interestingly, however, some other aspects of conflicts-of-law doctrine, and in particular case law surrounding the imperatives and limitations imposed on state courts by the Due Process and Full Faith and Credit Clauses, would have provided useful insights for the plurality and concurring decisions.
In Part I of this Article, I begin with a brief review of the basic methodology for resolving "Erie cases," and of some of the ways that horizontal choice-of-law jurisprudence might be imported into the Erie realm. In Part II, I then offer a brief summary of the facts, and Justice Scalia's plurality, (6) Justice Stevens's concurring, and Justice Ginsburg's dissenting (7) opinions in Shady Grove. In Part III, I analyze and criticize those opinions. In Part IV, I conclude with some observations about issues that remain unresolved after Shady Grove.
It is familiar learning that when a federal court serves as the forum for the adjudication of claims arising under state law, it may be required to apply state "rules of decision" to resolve many of the legal issues in dispute. At a minimum, this requirement is imposed by section 34 of the Judiciary Act of 1789 (8)--the so-called Rules of Decision Act. (9) And, without identifying specific provisions, Erie itself suggested that appropriate deference to state law was constitutionally mandated. (10)
But when? This question has vexed courts and commentators for the nearly three-quarters of a century since the Erie decision. So, let me first offer an abbreviated version of Erie for Dummies.
The starting point is the identification of the legal issue in question. For example, what is the duty of care owed by a railroad to someone walking parallel to its right of way? (11) What steps suffice to satisfy the state statute of limitations' requirements for "commencing" an action? (12) What should be the standard of review applied by a trial court of a jury verdict, and by an appellate court of the trial court's ruling thereon? (13) May a particular claim be asserted as a class action? (14)
At this stage, the court must identify the nature and scope of the state and federal "rules" (15) that would deal with that question. Do both of those rules in fact address and cover that question? Do they truly "conflict," or might they coexist, in part perhaps because the federal rule should be given a less expansive reading? If they can be harmonized--if they do not in fact clash--then the Erie problem largely disappears. If the state law is the only "rule" that is on point with respect to that issue, (16) then the federal court will of course apply it.
In my earlier article, I drew on horizontal choice-of-law jurisprudence to advocate for more robust attempts to give the federal rule a more limited reach, as a means of reducing or solving Erie problems. This approach would be consistent both with some of the primary goals of a conflicts regime, including enhanced comity, uniformity of outcome, and a reduction of "forum shopping," and with a fundamental underpinning of Erie--respect for the law-making and law-enforcement role of the states, based on the federal nature of the Republic. …