Cameron Miranda
Federal common law is a term used in the United States to describe common law developed by federal courts instead of state courts. While federal common law is limited, it continues to govern in several areas. In 1938, the Erie Doctrine established that federal courts exercising diversity jurisdiction must apply the same substantive laws as the courts of the states in which they are located. However, in certain cases, federal common law may still be applied, such as when a federal question is involved or when dealing with unique federal interests. Federal common law is also recognized in situations where state law is inadequate or when federal or Constitutional interests are at stake.
| Characteristics | Values |
|---|---|
| Definition | Federal common law is a term of United States law used to describe common law that is developed by federal courts instead of the courts of individual states. |
| Jurisdiction | Federal courts have jurisdiction over matters of federal concern, meaning federal law and, in particular, federal law that pre-empts state law when an issue is within the federal government's exclusive domain. |
| Diversity Jurisdiction | Federal courts exercising diversity jurisdiction have applied state law as the substantive laws, with few exceptions. |
| Erie Doctrine | The Erie doctrine, deriving from the Erie Railroad Co. v. Tompkins case in 1938, states that federal courts exercising diversity jurisdiction shall apply the "laws of the several states", including state common law. |
| Forum Shopping | The Erie doctrine aimed to prevent forum shopping, where diverse plaintiffs could select the most favorable law for their claim, leading to unequal administration of the law. |
| Constitutional Issues | Federal courts applying federal common law may offend federalism and the separation of powers, as the judiciary would have the power to create substantive law. |
| Federal Common Lawmaking | Federal common law is valid only when Congress has not repealed the common law. It must be "necessary to protect uniquely federal interests". |
| State Law | State courts are courts of general jurisdiction, empowered to hear state law and federal law claims. |
| Unwritten Law | Modern federal judges are more confident about the role of unwritten law in topics within the reach of state lawmaking powers than in topics beyond it. |
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What You'll Learn
Federal common law vs state law
Federal common law refers to the common law developed by federal courts in the United States, as opposed to the common law of individual states. The distinction between federal common law and state law is important, and the two types of law have different applications and implications.
Historically, federal courts applied state statutory law but disregarded state common law, crafting their own federal common law. This practice was overturned in 1938 with the Erie Railroad v. Tompkins case, which established the Erie doctrine. The Erie doctrine holds that federal courts exercising diversity jurisdiction must apply the same substantive laws as the courts of the states in which they are located, including state common law. This decision was based on the idea that the judiciary should not have the power to create substantive law, as this is the role of Congress.
However, there are still some areas where federal common law applies. For example, in the Clearfield Trust Co. v. United States case, the Court recognised that federal courts could create federal common law in limited circumstances where federal or Constitutional interests are at stake and Congress has not adequately addressed the situation. Additionally, federal common law may apply to certain federal question claims and diversity claims dealing with "unique federal interests".
State law, on the other hand, is the law developed and applied by the courts of individual states. State courts are considered courts of general jurisdiction, meaning they can hear cases involving state law and federal law claims. When a case is brought in state court based on state law, the court will apply state law without considering federal law. State law can include both written statutes and unwritten common law, and modern federal judges generally respect the legal status of state common law.
In conclusion, while federal common law does have some limited applications, state law is generally the primary source of law in the United States. Federal common law may be created by federal courts in specific circumstances, but it is subject to alteration by Congress and must be traced back to a written federal enactment. State law, on the other hand, is more flexible and can include unwritten common law, which is respected by federal judges.
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The Erie doctrine
In Swift v. Tyson, federal courts interpreted the "laws of the several states" to refer only to state statutes and local custom, excluding state common law. This interpretation allowed federal courts to disregard state substantive law when exercising diversity jurisdiction, instead applying their interpretation of the true general common law. This led to forum shopping, where diverse plaintiffs could choose the law that was more favourable to their claim. It also resulted in unequal administration of the law, as litigants from different states were treated differently.
The Erie case involved a railroad accident where the plaintiff, Tompkins, lost his arm. Under Pennsylvania state common law, Tompkins was considered a trespasser and could not recover damages. However, under the general common law, he was not a trespasser and could seek compensation. The Supreme Court, in an opinion by Justice Brandeis, refused to apply the general common law, stating, "there is no federal general common law". Instead, they applied the law of the state where the injury occurred, denying Tompkins' recovery.
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Federal common law in federal courts
Federal common law refers to the body of law created and applied by federal courts in the absence of controlling federal statutes. It is distinct from common law developed by the courts of individual states. While most common law is found at the state level, federal common law governs in specific areas.
The concept of federal common law has evolved through several key court cases. In Swift v. Tyson (1842), the U.S. Supreme Court held that federal courts hearing cases under diversity jurisdiction must apply statutory state laws but not the common law developed by state courts. This decision was based on the interpretation of the "laws of the several states" in the Rules Decision Act of 1789, which excluded state common law. However, in Erie Railroad Co. v. Tompkins (1938), the Supreme Court overturned Swift v. Tyson, asserting that federal courts exercising diversity jurisdiction must follow both statutory law and common law of the states in which they are located. This became known as the Erie Doctrine, emphasising that there is no "federal general common law".
Despite this, federal common law continues to apply in certain contexts. In Clearfield Trust Co. v. United States (1943), the Court recognised that federal courts could create federal common law in limited circumstances where federal or Constitutional interests are at stake, Congress has inadequately addressed the situation, and applying state laws would create unacceptable diversity or uncertainty. In such cases, courts may adopt reasonable state laws, follow their own precedents, or create new laws.
The legitimacy of federal common law remains a subject of debate. Some critics argue that federal courts should not have broad authority to invent new rules of decision, while others acknowledge the need for federal common law in areas of federal preemption. According to Justice Scalia, "there is no such thing as common law" in federal courts. Nevertheless, federal common law persists in matters where state law cannot provide answers due to federal preemption, and federal courts continue to play a role in shaping legal principles that have the status of federal law but lack written enactment.
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Forum shopping
Federal common law refers to the common law developed by federal courts in the United States, as opposed to the courts of individual states. While most common law is found at the state level, there are limited areas where federal common law continues to govern. Federal common law is valid only to the extent that it has not been repealed by Congress, which holds the power to alter or repeal federal common law.
Federal courts exercising diversity jurisdiction, where cases involve parties from different states, generally apply state law as the substantive law. However, federal common law can still be created in limited circumstances where federal or Constitutional interests are at stake, and the application of state laws would create unacceptable diversity or uncertainty. In such cases, federal courts may adopt state law, follow their own precedent, or create new law.
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Federal common law and the Constitution
Federal common law is a term used in the United States to describe common law developed by federal courts, rather than the courts of individual states. The concept of federal common law has been a topic of debate among legal scholars and judges, with some arguing that federal courts should not have the power to create common law, while others advocate for a limited role for federal common law in specific circumstances.
The Eighth Amendment of the US Constitution prohibits ex post facto laws for states, which means that federal common law cannot be applied retroactively to events that occurred before it was established. Additionally, the Constitution grants Congress the power to make laws, and federal common law cannot supersede federal statutes. In the case of United States v. Hudson (1812), the Supreme Court held that federal courts could not define new common law crimes and that a constitutionally valid statute must define federal crimes.
The Erie Doctrine, which emerged from the 1938 Supreme Court case Erie Railroad Co. v. Tompkins, further shaped the understanding of federal common law. The doctrine held that federal courts exercising diversity jurisdiction must apply the same substantive laws as the courts of the states in which they are located, including state common law. This decision overturned the previous precedent set by Swift v. Tyson, which allowed federal courts to disregard state common law and apply their own interpretation of "general common law".
While federal common law is limited, there are certain circumstances where it continues to govern. In the 1943 case of Clearfield Trust Co. v. United States, the Court recognised that federal courts could create federal common law when federal or Constitutional interests were at stake, Congress had not adequately addressed the situation, and the application of state laws would create unacceptable diversity or uncertainty. Additionally, federal common law may apply to federal question claims and diversity claims dealing with "unique federal interests".
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Frequently asked questions
Federal common law is a term used to describe common law developed by the federal courts, instead of by the courts of the various states.
Federal common law applies to certain federal question claims and diversity claims that deal with “unique federal interests”. Federal common law is valid only to the extent that Congress has not repealed the common law.
The Erie Doctrine derives from the landmark 1938 U.S. Supreme Court case, Erie Railroad Co. v. Tompkins. The doctrine holds that federal courts exercising diversity jurisdiction must apply the substantive laws of the states in which they are located, including state common law.
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