Under Erie, in diversity cases, which law governs substantive issues?

Under Erie, in diversity cases, which law governs substantive issues?

• A. Substantive State Law Governs; Federal Procedural Law Governs Procedure.
• B. Federal Law Governs All Substantive Issues.
• C. State Law Governs Procedure.
• D. No Standard; Outcome-Determinative Rules Vary By Court.

Answer: (A)

In diversity cases, Erie requires the federal court to apply the state's substantive law to the merits of the case, while using federal procedural rules to govern how the case is litigated. This means elements of the claim, damages, and other rights arising from state law are determined by state law, not by federal law. Meanwhile, the rules that govern how the case proceeds in federal court—pleading, discovery, evidence, and trial procedures—come from federal procedural law. So the best choice is that substantive issues are governed by state law, and procedure is governed by federal law. The other options misstate this balance: federal law does not govern all substantive issues in diversity, state law does not govern procedure in federal courts, and there is a standard Erie framework rather than no standard at all.

In diversity cases, Erie requires the federal court to apply the state's substantive law to the merits of the case, while using federal procedural rules to govern how the case is litigated. This means elements of the claim, damages, and other rights arising from state law are determined by state law, not by federal law. Meanwhile, the rules that govern how the case proceeds in federal court—pleading, discovery, evidence, and trial procedures—come from federal procedural law.

So the best choice is that substantive issues are governed by state law, and procedure is governed by federal law. The other options misstate this balance: federal law does not govern all substantive issues in diversity, state law does not govern procedure in federal courts, and there is a standard Erie framework rather than no standard at all.