Tompkins (P) sustained personal injuries when he was struck by an Erie Railroad Company (D) freight train in Pennsylvania while walking on a footpath adjacent to the tracks. Tompkins was a citizen of Pennsylvania and Erie Railroad Company was incorporated in New York.
Tompkins brought this personal injury lawsuit in diversity in federal district court in New York, asserting that he was lawfully on the property as a licensee, and that the accident occurred as a result of Erie Railroad’s negligence in the operation or maintenance of the train. Erie Railroad Company denied liability and asserted that the rule that had been established in the courts of Pennsylvania should apply. Under that rule, persons using pathways adjacent to railways were deemed trespassers and the railroad would not liable for injuries unless its actions were wanton or willful.
Tompkins denied that such a rule had been established by the Pennsylvania courts. He further contended that since no Pennsylvania statute addressed the issue of liability in such cases, the railroad’s duty and liability should be determined according to the rule established in federal court in light of Swift v. Tyson. Under federal common law Tompkins would be regarded as a licensee. Railroads owed a duty of ordinary care to pedestrians and would be liable upon a showing of ordinary negligence.
At trial, the jury returned a verdict in favor of Tompkins for $30,000. The Circuit Court of Appeals affirmed, holding that in regards to questions of general law that are not covered by state statute, federal courts are free to exercise their judgment as to what the law is. The Circuit Court of Appeals held that railroads owe a duty of ordinary care to those who use permissive pathways adjacent to railroad tracks. The defendant appealed and the Supreme Court granted certiorari.
In actions in diversity, except in matters governed by the Constitution or acts of Congress, must federal courts apply state common law in addition to statutory law?
Holding and Rule (Brandeis)
* Yes. In actions in diversity, except in matters governed by the Constitution or acts of Congress, federal courts must apply state common law in addition to statutory law.
In diversity cases, federal courts must apply state law as declared by the highest state court in addition to state statutory law. There is no federal general common law. Congress has no power to declare substantive rules of common law applicable in a State and the Constitution does not confer such a power upon the federal courts.
In disapproving the doctrine of Swift v. Tyson, the Court does not hold section 34 of the Federal Judiciary Act of 1789 unconstitutional. It merely declares that, by applying the doctrine of that case, rights which are reserved by the Constitution to the several States have been invaded.
The ruling in Swift v. Tyson is overruled. It was an unconstitutional assumption of powers by the Courts of the United States. Federal courts do not have the power to create federal common law as this gives federal courts powers not granted in the Constitution.