Erieblogging: Day Twenty-Eight

Today’s Erie question is about “countervailing federal interests.” Assume that a procedural matter faced by a federal court sitting in diversity is not covered by federal enacted law (that is, a federal statute or a Fed. R. Civ. P). That puts us in “relatively unguided Erie” territory. Assume as well that the relevant state supreme court would not say that a state rule on the matter follows the state law cause of action upon which the plaintiff sues into federal court. That gets us out of Byrd’s “bound up” test. If so, whether the federal court should use a uniform federal common law rule or borrow the rule that would be used by a forum state court comes down to two sets of considerations – the twin aims of Erie (which argue for borrowing) and countervailing federal interests in favor of using a uniform federal common law rule.

My students usually have pretty good idea how to apply the twin aims (or at least the forum shopping part) and sometimes even have intuitions about whether a rule is bound up with the cause of action. What they have the most difficulty with is identifying countervailing federal interests. Consider whether a federal court can apply a uniform federal common law time limit to state law actions – maybe a flexible approach like laches (which was what was at issue in Guaranty Trust v. York). There would obviously be vertical forum shopping as a result. But why aren’t there countervailing federal interests in favor of the flexible federal rule? No one, to my knowledge, has a good theory about why not.

With an expansive view of countervailing federal interests, the twin aims are toothless. There needs to be some restriction on identifying such interests. The restriction cannot be that countervailing federal interests must be grounded in federal enacted law. Granted, such an approach would make some sense. The twin aims are apparently a congressional restriction on federal courts’ power over federal procedural common law in diversity cases. This restriction arguably can be lifted only by another congressional command. The problem is that federal courts commonly find countervailing federal interests without pegging them to federal enacted law.

Countervailing federal interests are, in short, a mystery, but probably no more mysterious than the idea of restrictions on federal common law in general.

(Parallel posted on Michael Green's Civ Pro Blog.)