When No Directive Controls

When No Directive Controls

Hanna v. Plumer announces a two-part test. If a Federal Rule or a federal statute is valid and, properly construed, speaks to the question, it controls, and the court need pay no regard to contrary state provisions.¹ Everything earlier in this chapter, from the direct collision test to the Enabling Act's limits, concerns that first part. The second part takes over when the first yields nothing. The court then faces what Hanna called "the typical, relatively unguided Erie choice," and it makes the choice by asking, through the twin aims of Erie, whether ignoring the state rule would encourage forum shopping or produce inequitable administration of the laws.²

The Rules of Decision Act explains why state law fills the space when no federal directive applies. It provides that the laws of the several states "shall be regarded as rules of decision in trials at common law in the courts of the United States in cases where they apply," except where the Constitution, treaties, or federal statutes otherwise require or provide.³ A constitutional provision or statute that speaks to the point therefore falls within the Act's own exception. A Federal Rule reaches the same result by a different route. Hanna was not a Rules of Decision Act case in which a federal judge-made rule collided with state law, so Erie and the outcome-determinative test did not govern it. The Rules Enabling Act did.⁴ The Erie machinery exists for the other situation, in which a judge-made federal practice meets state law and no enacted federal text has settled the matter.

A case reaches that inquiry through one of two doors. The federal provision may not cover the point at all, which is the result when a court reads a Rule narrowly. Or it may cover the point and fail the validity test. The Enabling Act forbids a rule that abridges, enlarges, or modifies any substantive right, so the court asks whether the rule truly regulates the practice and procedure of the federal courts or instead alters the rules of decision by which the court adjudicates the merits.⁵ A court may refuse to apply a Rule only if the Advisory Committee, the Supreme Court, and Congress erred in judging that the Rule transgressed neither the Enabling Act nor constitutional restrictions.⁶

The order of the inquiry reflects how the two halves compare. Chief Justice Warren's Hanna opinion has been praised for finally providing a simple and clear test for the validity of federal procedural practices under Erie, and for safeguarding the Rules from encroachment in diversity cases by conflicting state practices. The balancing test of Byrd, by contrast, is the approach that was plagued by vagueness and nonobjectivity.⁷ A court therefore settles the clearer questions first, whether a federal text covers the point and whether it is valid, and turns to the unguided choice only when those questions leave the matter open.

The steps follow the order in which the cases built them. Guaranty Trust and its outcome-determinative test aggressively treated many issues as substantive for Erie purposes. Byrd then served as a safety valve, letting important federal interests trump state law as to state-law forms and modes of enforcing rights. Hanna later explained that outcome determination was never a talisman. It is read by reference to the policies underlying Erie, namely preventing forum shopping and applying the law equitably, and from the point of view of one choosing where to file.⁸

Hanna and Walker v. Armco Steel Corp. show how the first question separates the two paths, because in each a state requirement could have ended the suit. In Hanna, a Federal Rule on service of process clearly applied, so the test was whether the Rule fit within the Rules Enabling Act and, if so, within a constitutional grant of power such as the Necessary and Proper Clause. The twin aims did not decide the result.⁹ In Walker, the Court found no controlling federal Rule and returned to the Erie inquiry. Applying the state service law might not have created any forum-shopping problem, but refusing to apply it would have meant the "inequitable administration" of the law. There is no reason why, absent a controlling federal rule, a state-law action that concededly would be barred in state court should go forward in federal court.¹⁰ Outcome sensitivity cannot explain the difference, since a state rule capable of ending the suit appeared in both cases. What separated them was whether an enacted federal text answered the question the state rule answered. Ask that question first on any fact pattern, because it decides which half of Hanna applies.

A full treatment of outcome determination, the twin aims, and Byrd balancing belongs to the separate study of Erie analysis without a federal directive. This chapter needs only the order of operations: a court reaches that analysis after it has asked whether a Federal Rule, statute, or constitutional provision covers the point and whether that provision is valid.