Erie Doctrine Flowchart

You reach Erie whenever a federal court sits on a claim governed by state substantive law. That is most often diversity jurisdiction, but it also covers state-law claims heard under supplemental jurisdiction, state claims in bankruptcy, and state claims removed alongside federal ones. It does not apply to federal claims, where federal law supplies the rule of decision outright.

The statutory hook is the Rules of Decision Act, 28 U.S.C. § 1652: state laws "shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply." Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), overruled Swift v. Tyson by reading "laws" to include state common law, and grounded the result partly in the Constitution — there is no general federal common law because Congress lacks power to declare substantive rules of state tort or contract law.

Before the flowchart, do the choice-of-law step. Under Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487 (1941), a federal court applies the choice-of-law rules of the state in which it sits. If the case was transferred under § 1404(a) at the defendant's request, the transferor state's choice-of-law rules travel with it (Van Dusen v. Barrack).

Identify the precise issue in conflict — not "procedure" in the abstract, but the exact question, like "how must process be served" or "may a class action be maintained for statutory penalties." Then ask what federal source, if any, speaks to it. There are three tiers, and the tier determines the test.

If the Constitution speaks (the Seventh Amendment, for instance), it wins. If a federal statute speaks, the court asks whether the statute is sufficiently broad to control the issue and, if so, whether it is a valid exercise of Congress's power — a test the statute will essentially always pass. Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988), took this route: 28 U.S.C. § 1404(a) governed the effect of a forum-selection clause, displacing Alabama's hostility to such clauses. If a Federal Rule of Civil or Appellate Procedure speaks, you move to the Rules Enabling Act track below.

If nothing federal covers the issue, skip to unguided Erie. Do not conflate the tracks; mixing Hanna's Rules Enabling Act analysis with Hanna's twin aims test is the single most common exam error.

First ask whether the Federal Rule directly conflicts with state law — whether the Rule and the state provision answer the same question. Hanna v. Plumer, 380 U.S. 460 (1965), found a direct collision between Rule 4's service provisions and Massachusetts's in-hand service requirement. Walker v. Armco Steel Corp., 446 U.S. 740 (1980), found no collision: Rule 3 tells you when an action is commenced for purposes of the Rules, but says nothing about when a state limitations period stops running, so Oklahoma's service-based tolling rule applied.

If there is a conflict, ask whether the Rule is valid under the Rules Enabling Act, 28 U.S.C. § 2072 — does it "really regulate procedure" and does it "abridge, enlarge or modify any substantive right"? Sibbach v. Wilson & Co., 312 U.S. 1 (1941), upheld Rule 35 on this test, and the Supreme Court has never invalidated a Federal Rule under the Act. Burlington Northern R.R. v. Woods, 480 U.S. 1 (1987), upheld Federal Rule of Appellate Procedure 38 over Alabama's mandatory affirmance penalty.

Shady Grove Orthopedic Associates v. Allstate Insurance Co., 559 U.S. 393 (2010), fractured on the validity step. Justice Scalia's plurality asked only whether the Rule regulates procedure, looking solely at the Rule's own operation. Justice Stevens, concurring and supplying the fifth vote, asked whether the displaced state law is "so intertwined with a state right or remedy that it functions to define the scope of the state-created right." Under Marks, Stevens's narrower test is generally treated as controlling, and most circuits apply it.

Start with Guaranty Trust Co. v. York, 326 U.S. 99 (1945): would applying federal practice significantly affect the outcome of the litigation? York applied a state statute of limitations to an equitable claim on that reasoning. Standing alone the test proves too much — almost any procedural difference can affect outcomes — so Hanna refined it.

Apply the outcome-determination test in light of the twin aims of Erie: discouraging forum shopping and avoiding inequitable administration of the laws. Ask whether the difference between federal and state practice would have influenced the plaintiff's choice of forum at the outset of the case, not with hindsight after the case is lost. In Hanna, the service difference would not have.

Then run Byrd v. Blue Ridge Rural Electric Cooperative, 356 U.S. 525 (1958): even if state practice is outcome-affecting, weigh countervailing federal interests, particularly practices that are an "essential characteristic" of the federal court system. Byrd let the federal jury, not the judge, resolve a fact that South Carolina assigned to the judge. Gasperini v. Center for Humanities, Inc., 518 U.S. 415 (1996), shows the modern move: rather than pick a winner, the Court accommodated both, having federal trial judges apply New York's "deviates materially" excessiveness standard while preserving federal abuse-of-discretion appellate review to satisfy the Seventh Amendment's Reexamination Clause.

Memorize a short classification list so you can identify the branch fast. The following are settled or near-settled.

Open by stating the precise issue and the source of the potential federal rule. One sentence: "The question is whether the plaintiff's failure to file a certificate of merit requires dismissal; the arguably conflicting federal directives are Rules 8, 9(b), and 12(b)(6)." That sentence alone routes you down the right branch and tells the grader you understand the structure.

If you are on the Federal Rule branch, spend most of your words on the conflict question, because that is where the real argument lives. Argue both ways using Walker and Shady Grove: can you read the Federal Rule narrowly so both provisions coexist? If you find a conflict, dispose of Rules Enabling Act validity in a short paragraph noting Sibbach's deference and flagging the Stevens/Scalia split if the state rule looks substantive.

If you are on the unguided branch, do all three moves explicitly — York outcome determination, Hanna twin aims measured ex ante, Byrd federal interests — and finish with a Gasperini-style accommodation proposal if one exists. Graders reward students who notice that the modern Court prefers harmonizing to choosing.

Two traps. First, Erie tells you which sovereign's law applies, not what that law says; if state law is unclear, the federal court must predict how the state's highest court would rule, and many states allow certification of the question. Second, Erie does not displace federal law on inherent judicial powers such as sanctions (Chambers v. NASCO, Inc., 501 U.S. 32 (1991)).