When a federal court exercises diversity jurisdiction, what determines whether state substantive law or federal procedural law applies to the case?
The Full Faith and Credit Clause
The Erie Doctrine
The Supremacy Clause
The Rules Enabling Act
The Erie Doctrine, derived from the landmark case Erie Railroad Co. v. Tompkins, governs whether a federal court applies state substantive law or federal procedural law. Under this doctrine, federal courts are required to apply state substantive law and federal procedural law in diversity cases to prevent forum shopping and inequitable administration of the laws. Substantive law determines the rights and duties of the parties, such as elements of a claim, while procedural law governs the process of litigation, such as filing deadlines. It is essential to consider whether applying federal law instead of state law would encourage forum shopping or lead to an outcome significantly different from the state court.
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