1. Federal courts must determine which law will apply to the diversity cases.
1.1. Vertical law choice occurs when there is a federal v. state law choice to be made
2. Also called conflict of law questions
3. A case in federal court w/ diversity jurisdiction
3.1. Federal and State law conflict, and must determine which law will apply
4. Basic rule
4.1. State substantive law will apply with the Federal Civil Procedure Rules
4.1.1. Federal courts will apply judge made laws and state statutes (substantive law)
4.2. Both Substantive and codified law apply to all cases.
5. Designed to discourage forum shopping and avoid inequitable application of state laws.
6. Test: Examine source of Federal law
6.1. Constitution
6.1.1. Federal law will govern
6.2. Congressional Law
6.2.1. Generally, if an act of congress or statute then apply federal law
6.2.2. If SCOTUS under the Rules Enabling Act passes a federal procedure rule, it governs.
6.3. Judge made
6.3.1. Twin aims of Hannah v. Plummer
6.3.1.1. Will the federal rule application affect outcome significantly?
6.3.1.2. Application of the federal law will not encourage forum shopping.
6.3.2. If the federal rule involves an essential characteristic of the federal court system, balance the factors
6.3.2.1. Relationship b/w rule and state right
6.3.2.2. Interests of federal judicial system
6.3.2.3. Likelihood federal rule will affect outcome.
7. Post Hanna Analysis
7.1. Vertical choice of law issue?
7.1.1. Is state rule bound in rights/obligations of the parties?
7.1.1.1. Yes
7.1.1.1.1. State rule applies
7.1.1.1.2. No- Twin Aims
7.1.2. Is the federal law sourced from:
7.1.2.1. Constitution?
7.1.2.1.1. Federal Applies
7.1.2.2. Is it one to regulate procedure by congress?
7.1.2.2.1. Yes. Federal
7.1.2.2.2. No, State Law
7.1.2.3. Would a rational person find to be procedural?
7.1.2.3.1. Yes
7.1.2.3.2. No