June 2006, Volume 92, Issue 4
Deforming the Federal Rules: An Essay on What's Wrong with the Recent Erie Decision
by Earl C. Dudley, Jr. and George Rutherglen
92 Va. L. Rev. 707 (2006)
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This essay discusses two troubling decisions of the Supreme Court under the Erie doctrine. In Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996), the Court held that a state statute providing for enhanced appellate review of jury verdicts must be followed by federal trial courts (but not federal courts of appeal) in diversity cases. This decision creates a rule that is a pastiche of federal and state law, but neither the one nor the other. Through such ad hoc lawmaking, the decision almost turns the Erie doctrine on its head by creating “‘a transcendental body of law outside of any particular State but obligatory within it.’” And in Semtek International Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001), the Court held that a dismissal that “operates as an adjudication upon the merits” nevertheless does not preclude a subsequent action in a different forum on the same claim. We are left to wonder what kind of judgment is necessary to actually bring litigation to a close.
These decisions are puzzling and for that reason have attracted a chorus of academic criticism. Yet decisions so complex and counterintuitive demand explanation as much as criticism and this essay seeks to explain how the Supreme Court has reached this impasse in applying and expounding the Erie doctrine. Part I locates the initial problem with the decision in the unwonted complexity of the Court’s holdings. Convoluted legal doctrine may be the natural consequence of hard-fought constitutional controversies, but the principles underlying the Erie doctrine should by now have been long settled. In Gasperini and Semtek, the Court could have reached a better decision in each case by the simple expedient of directly confronting the choice whether to give full effect to a Federal Rule of Civil Procedure, and if not, declaring it partially or wholly invalid. Part II offers an explanation of why the Court did not take this course. There are three components to this explanation: first, implicit or explicit doubts about the scope and validity of the Federal Rules; second, a tendency to give the Federal Rules an artificially narrow interpretation to avoid perceived conflicts with state law; and third, a resort to case-by-case determinations when a federal rule is claimed to infringe upon a state substantive right as the dominant means of resolving questions under the Erie doctrine. This essay concludes with some reflections on consequences of these decisions for the stability of the Federal Rules and their ability “to secure the just, speedy, and inexpensive determination of every action.”
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