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Friday, June 23, 2006

The Resurgence of Federal Common Law? Not So Much...

Over at his eponymous blog, Orin beats me to the punch on the Court's fascinating decision yesterday in Dixon, waxing all kinds of philosophic on federal common law and the criminal justice system (amazingly, without a reference to Hudson & Goodwin... too bad).

Orin's post gives me a chance to talk about another fascinating fed-courts-heavy decision from this month, the complicated decision in Empire Healthcare Assurance, Inc. v. McVeigh, which prompted the first (so far as I know) 5-4 split featuring Justices Kennedy, Souter, Breyer, and Alito on the short side.

In McVeigh, the Court deals with the nasty issue of "the proper forum for reimbursement claims [under the Federal Employees Health Benefit Act (FEHBA)] when a plan beneficiary, injured in an accident, whose medical bills have been paid by the plan administrator, recovers damages (unaided by the carrier-administrator) in a state-court tort action against a third party alleged to have caused the accident."

The Court considered three different theories for federal jurisdiction -- first, that a suit to vindicate contractual rights under the FEHBA raises a federal claim; second that such a suit satisfies the well-pleaded complaint rule, because "federal law is a necessary element of [the] claim"; and third, that even if FEHBA doesn't satisfy Section 1331, the Court can fashion a rule of federal common law, under Clearfield Trust, to sustain federal jurisdiction.

The third argument, motivated by Justice Breyer's snarky dissent (e.g., "the Court cannot find a basis for federal jurisdiction. I believe I can"), with which I basically agree, is the most interesting, and the least commonly before the Court. Erie, of course, did not signify the end of federal common law, and FCL today serves a number of important purposes, particularly in the area of government contracts. Thus, I find rather persuasive Justice Breyer's conclusion that:

given Clearfield Trust and its progeny, there is every reason to believe that federal common law governs disputes concerning the agency/carrier contract. And that is so even though “it would have been easy enough for Congress to say” that federal common law should govern these claims. After all, no such express statement of congressional intent was present in Clearfield Trust itself, or in any of the cases relying on Clearfield Trust for the authority to apply federal common law to interpret Government contracts.

Indeed, if we are to have a robust theory of modern federal common law, why isn't this case one that fits within the model? More to the point, why isn't Justice Breyer correct that:

even if the Court is correct that state law applies to claims involving the interpretation of some provisions of this contract, the decision whether and when to apply state law should be made by the federal courts under federal common law. Accordingly, for jurisdictional purposes those claims must still arise under federal law, for federal common law determines the rule of decision.

Anyway, the details get very messy and murky very quickly, but given Dixon, and given the odd lineup of the Justices, I thought I'd also flag this other interesting case largely implicating the 400-pound gorilla that is federal common law today.

Posted by Steve Vladeck on June 23, 2006 at 11:34 AM in Constitutional thoughts, Steve Vladeck, Teaching Law | Permalink


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I'm glad you saw the Hudson & Goodwin reference yourself. It's interesting to combine the H&G's holding that there is no (and arguably could be no) federal common law of substantive crimes, but nonetheless there apparently is a federal common law of substantive defenses (uncrimes).

Posted by: Will Baude | Jun 23, 2006 3:55:54 PM

It's all a long way from "[t]here is no federal general common law," Erie RR v. Tompkins, 304 U.S. at 78 (emphasis added).

Posted by: Simon | Jun 23, 2006 1:05:29 PM

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