Federal common law
Federal common law refers to the legal principles and precedents developed by federal courts in the United States, particularly in civil matters, as distinct from state law. The origins of federal common law can be traced back to the Judiciary Act of 1789, which allowed federal courts to operate independently of state common law when dealing with cases involving parties from different states. In the landmark case Swift v. Tyson (1842), the Supreme Court ruled that federal courts were not bound by state common law, leading to the establishment of a distinct body of federal common law. However, this decision resulted in a lack of uniformity, as states did not adopt federal legal models consistently.
The situation evolved with the Supreme Court's ruling in Erie Railroad Co. v. Tompkins (1938), which overturned Swift and mandated that federal courts must adhere to both the statutes and common law of the states in which they operate. This significant shift restored state control over legal matters and effectively nullified the independent body of federal common law that had emerged over the previous century. The transition underscores the dynamic relationship between federal and state legal systems and highlights the ongoing challenges of achieving legal consistency across jurisdictions.
Subject Terms
Federal common law
Description: Body of decisional, or judge-made, laws applied by federal courts.
Significance: For nearly a century, until a 1938 Supreme Court ruling, federal common law abridged the power of the states to control their internal legal affairs.
The Supreme Court holding, in United States v. Hudson and Goodwin (1812), that no federal common law existed with regard to criminal matters, did not prevent the federal courts from developing a substantial body of civil common law. Federal common law development was abetted by the Court’s interpretation of section 34 of the Judiciary Act of 1789. Justice Joseph Story, speaking for a unanimous Court in Swift v. Tyson (1842), held that section 34 required federal courts exercising diversity of citizenship jurisdiction (cases involving citizens of different states) to follow only the statutory law of the states in which they sat; they were not bound by state common law. The decision freed the federal courts from the constraints of state common law, enabling them to develop a coherent body of federal common law that the states in turn were expected to adopt for the sake of uniformity.
However, the expected uniformity was never achieved. The failure of the states to adopt the federal models led to competing systems of state and federal common law. Far from promoting uniformity among the states, Swift caused confusion and uncertainty within the states. In Erie Railroad Co. v. Tompkins (1938), a unanimous Court overruled Swift, holding that federal courts exercising diversity jurisdiction must follow both the statutes and common law of the states in which they sit. The decision voided nearly a century of federal common law, returning to the states full control of their internal legal affairs.