Its time to backtrack a bit and explain what I mean by an “Erie v. Tompkins” dilemma. I promised when I started this blog that I would not descend into legalese, but now I’m going to have to get a bit close. I promise that this is as bad as it will ever get.
Although you’ve probably never heard of it, 1938’s Erie Railroad v. Tompkins is probably the single most important Supreme Court decision since Marbury v. Madison, the case that determined that the Supreme Court was the ultimate arbiter of what is or isn’t constitutional. The facts in Erie v. Tompkins were almost absurdly simple. Tompkins was a citizen of Pennsylvania. The Erie Railroad was a corporate citizen of New York. Tompkins was hurt in a railroad accident that occurred in Pennsylvania. State law in Pennsylvania favored railroads. State law in New York favored victims. Cases decided in federal court leaned towards victims as well. Whose law applied?
Most people think that the federal courts exist to decide matters pertaining to federal law, so-called “federal question” issues. Surprisingly, this is usually not so. Under Article II of the Constitution, the federal courts are given jurisdiction over disputes “between Citizens of different States.” So by the time of the Erie case, there was already a well-established way to prevent a plaintiff from gaining an automatic home-field advantage over a defendant. For example, if a citizen of State A wanted to sue a citizen of State B, Citizen A couldn’t just walk into his home state’s court, file, and demand that Citizen B show up. Instead, A must go and file suit in the federal court in B’s home state. This is called “diversity”, and most cases in the federal courts are these diversity cases. Tompkins did this, suing the Erie in New York federal court.
The court, following then-standard practice, applied federal law and awarded Tompkins $30,000. The Supreme Court reversed this, determining that the federal court should have applied Pennsylvania law, because that is where the accident happened. In other words, the federal court should have “stepped into the shoes” of a Pennsylvania state court. The only time federal law should be applied, according to the Supreme Court, is when the dispute involves a federal question. Thus, to this day, you’ll see the seemingly bizarre spectacle of a North Dakota federal court applying California law.
The federal court in Erie said that Pennsylvania’s laws should apply because the law, in both New York and Pennsylvania, said “the court where the accident happened has jurisdiction.” Predictably, the next controversy arose over how to decide whose laws should apply when the two don’t agree. That is, whose law should be used to decide whose law gets used? Again, the first rule applied was that federal procedures (called “conflict of law” rules) should apply. During the period of time we have been discussing, the 1940s and 1950s, there was huge turmoil between many federal and state courts (especially in New York) about whether federal or state conflict of law rules should be applied in diversity cases.
Recall the Capitol v. Mercury case, the one dealing with the Telefunken imports. Judge Dimock, representing the majority view, held that phonorecords were not within the category of writings that were “copyrighted works”. Therefore, they were controlled by state law; and thus, state law determined if they were “published.” Judge Hand, to the contrary, argued that all things that are writings are “copyrighted works” under the language of section 4 of the 1909 Copyright Act. Therefore, the records were not controlled by state law, and federal law alone determined if they were published or not. This argument boiled down to whose law should apply. If federal law applied, “published” could be defined one way. If state law applied, “published” could be defined another way. In reality, this was a struggle over judicial power, a struggle that was also at the heart of the Capitol v. Naxos IV decision.
To be continued…