Reassessing the Avoidance Canon in Erie Cases

Abstract

This Article advocates that the Supreme Court recalibrate the avoidance canon it uses in Erie cases in which Federal Rules are in potential conflict with state law. The Article examines the Court’s historical use of avoidance in Erie cases, observing that contemporary jurists inappropriately conflate the purposes of pre- and post-Hanna avoidance when they conclude that avoidance in both periods protected state interests. Avoidance in the post-Hanna period has been premised on protecting important state interests and regulatory policies, but pre-Hanna avoidance attempted, with mixed success, to protect the Federal Rules. The Article also discusses the Court’s post-Hanna focus on federalism interests as the guiding principle for avoidance, which has permitted state law to override Federal Rules and has permitted differing interpretations of a single Federal Rule in diversity and federal question cases. This focus has permitted replication, on a Rule-by-Rule basis, of the results realized under Guaranty Trust’s outcome determinative principle.

In the Court's most recent Erie case, Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co, 130 S. Ct. 1431 (2010), the justices, for the first time, enage in an extended discussion of the extent and nature of an appropriate avoidance principle. Justice Scalia, in dicta, proposes a type of “classical” or “narrow” avoidance; Justice Stevens, in concurrence, suggests a broader avoidance canon modeled on “serious doubts” principles, which would counsel avoidance if the most natural construction of a Rule would raise serious doubts about the Rule’s validity under the Rules Enabling Act (REA); and Justice Ginsburg, in dissent, advocates avoidance based almost solely on respect for important state interests and regulatory policies. The Article concludes that an avoidance principle is warranted in REA cases, and it should be based on analogy to construing statutes narrowly to avoid serious constitutional doubts, in a manner similar to the avoidance principles proffered by Justice Stevens in Shady Grove.

Keywords: Federal Courts, Civil Procedure, Erie, Erie Doctrine, Federal Rules, Rules Enabling Act, Preemption, Shady Grove, avoidance, avoidance canon, Bernadette Bollas Genetin

JEL Classification: K10, K19