Concept
Hanna and the Twin Aims
Erie analysis when no federal rule controls
Hanna and the Twin Aims
Hanna v. Plumer, 380 U.S. 460 (1965), recast the outcome-determinative test as a question about the purposes of Erie, and it did so in a dispute over how to serve a defendant. The plaintiff left her papers with the executor’s wife at his home, as Federal Rule 4(d)(1) (now Rule 4(e)(2)) allowed, while a Massachusetts statute called for delivery in hand. The district court granted summary judgment for the executor, citing Ragan and York, and the First Circuit affirmed, calling the conflict one over “a substantive rather than a procedural matter.”1 A plaintiff who had followed the Federal Rules lost her case, and a literal reading of York had put her there.
The opinion runs on two tracks. The second begins from the fact that Rule 4(d)(1) was a Federal Rule, recommended by the Advisory Committee on the Civil Rules and promulgated under the Rules Enabling Act, and it is taken up later in this chapter.2 The first, which this section covers, treats the service dispute as the “relatively unguided Erie choice” between an uncodified federal practice and state law and concludes that such conflicts call for a “modified outcome-determinative test” built on avoiding forum shopping and inequitable administration of the laws.3 Because a Federal Rule actually governed the case, that first analysis is dicta,4 yet it supplies the test for disputes in which nothing federal addresses the point. Hanna itself drew the line: York’s rule is for situations where no Federal Rule applies, and it is not coextensive with the limit on Congress to which Erie adverted, because Congress may regulate matters that fall in the uncertain area between substance and procedure and are rationally capable of classification as either.5
A test built on purposes was needed because outcome alone proves too much. Under the Massachusetts rule the case was over, and under the federal rule it went on, so a literal comparison of results favored the state requirement. Yet the plaintiff, for relying on a federal rule, was punished with a dismissal too late to start the action over, and the Court recognized that affirming would make it dangerous for any party in a diversity case to rely on the Federal Rules for procedural instruction, even for something as mechanical as serving a summons.6 The literal test does not stop at service, either. Under the right circumstances even a trivial difference, such as the wrong filing fee or the wrong color of brief cover, can keep a case from being docketed and so alter the outcome, and a test that treated such differences as controlling produced the constricted view of federal procedural power that Ragan reflects.7 The Court therefore kept outcome determination but tied it to what Erie was meant to prevent: forum shopping and inequitable administration of the laws.8
Two subsections take the aims in turn, and a third fixes the moment from which a court measures a difference between state and federal practice. The common mistake is to report Hanna as holding that a federal court must follow any state rule that could change the result. That is the literal York reading Hanna was written to correct. The question is whether the difference would influence a litigant’s choice of court, or would leave a diversity litigant materially better or worse off than a citizen in state court.
The Forum-Shopping Aim
Where no valid federal provision governs the point, a federal court in a diversity case follows state law when ignoring it would encourage forum shopping, which means choosing the state or the federal court because the law applied there favors one’s side. Hanna reached that formulation by correcting the executor’s reading of Guaranty Trust Co. v. York. He read York to require state law whenever federal law would change the outcome. The Court answered that outcome-determination analysis “was never intended to serve as a talisman,” and that York itself teaches that choices between state and federal law are made “not by application of any automatic, ‘litmus paper’ criterion, but rather by reference to the policies underlying the Erie rule.”9
The policy has a history. Under Swift v. Tyson, 16 Pet. 1 (1842), counsel for an out-of-state plaintiff could choose state or federal court according to which viewed the common law more favorably to the client. The in-state defendant had no say in the forum, and an out-of-state defendant sued in state court could remove if the common law was better in federal court.10 The advantage to non-citizens was clear, and Black & White Taxicab, a leading case applying the doctrine, made it stand out in bold relief.11 Erie’s deepest ground is constitutional, since the federal government has no power to make law on matters outside its enumerated limits, but the Court has never divested itself of the notion that a desire not to promote forum shopping lies at the core of the decision.12
Hanna drew its working lesson from that history. York had framed its inquiry in terms of “substantial” variations between state and federal litigation, and Hanna read the word as an effort to serve these policies, because trivial variations are unlikely to influence the choice of a forum.13 The reasoning is simple. Forum shopping happens only when a litigant compares two courthouses and finds better prospects in one, so a difference touches the aim only if it is large enough for a litigant to act on.
Hanna’s own facts show the aim at its weakest. The Court conceded that, at the moment it ruled, the choice of rule decided the case: if the state rule applied the executor prevailed, and if Rule 4(d)(1) governed the litigation continued. It still found the difference of “scant, if any, relevance to the choice of a forum,” because the plaintiff, “in choosing her forum, was not presented with a situation where application of the state rule would wholly bar recovery”; adherence to the state rule would only have altered the way process was served.14 A plaintiff would hardly choose federal court merely to avoid serving the defendant in person, since the effort required differs only marginally.15
The aim operates at full strength when the difference decides whether the claim survives at all. In York, a state limitations statute would have barred a suit that a federal equity court applying laches would have heard, and the Court asked whether a federal court in equity could take cognizance of a claim that could not be enforced in the state’s courts.16 A difference of that size is one a litigant would act on, which is why Hanna could read York as consistent with the aim. A contributory-negligence bar works the same way. From the position of a lawyer choosing where to file, the bar would defeat a partly careless plaintiff’s claim outright, so it is outcome-determinative.17 The same line runs through proof: burden of proof can become substantive, especially when all first-hand witnesses are dead and the party carrying it will usually lose, so it goes to state law, while the mere burden of pleading, which requires only a verbalization on paper, does not necessarily.18
The cap and the service method sit at opposite ends of the range. The cap changes what the plaintiff can collect, and the service method changes only how the defendant receives the papers. The lawyer in the hypothetical has a reason to pick a courthouse, while Hanna’s plaintiff had none.
The retrospective question, by contrast, proves too much. Once a party has missed a step, nearly any procedural difference decides the case. The Court observed that a plaintiff who sues in federal court cannot insist on the state’s time limits for later pleadings, even though holding him to the federal timetable will end the case against him if he persists, and in that sense every procedural variation is outcome-determinative.19 A defendant who shows only that the state rule would end the case has therefore described a result almost any procedural difference can produce. He has not shown that anyone would have chosen a courthouse because of it.
Justice Harlan’s concurrence adds that the opposite oversimplification fails as well. A bare forum-shopping rule also proves too much, because litigants often choose a federal forum merely to obtain what they consider the advantages of the Federal Rules, or to try their cases before a supposedly more favorable judge.20 A litigant’s wish for federal procedure or a favorable judge cannot by itself be what the aim guards against. The concern is a difference substantial enough to change how a state-created right is enforced.
The Inequitable-Administration Aim
The second aim, avoiding inequitable administration of the laws, rests on Hanna’s statement that the Erie rule “is rooted in part in a realization that it would be unfair for the character or result of a litigation materially to differ because the suit had been brought in a federal court.”21 The forum-shopping aim watches a litigant deciding where to file. This aim compares two holders of the same state-created claim after the case is in court, and it asks whether one of them is treated materially differently only because diversity of citizenship gave that litigant access to a federal court.
Diversity jurisdiction exists to protect non-citizens from discrimination in state courts, and Swift turned that discrimination around. It made rights under the unwritten general law vary with the court in which enforcement was sought, and it gave the non-citizen the privilege of choosing the court.22 A federal court that enforced a state-created right more loosely than the state’s own courts would repeat the pattern, favoring the out-of-state litigant over a citizen holding the identical claim. The unfairness lies in the comparison between courthouses, so it can arise even when no litigant weighed the courthouses at all. The aim also has a threshold: trivial variations are unlikely to raise the equal-protection concern that troubled the Court in Erie, so a difference must substantially alter how the state-created right is enforced before this aim demands state law.23
Walker v. Armco Steel Corp., 446 U.S. 740 (1980), shows the second aim deciding a case by itself. Ragan v. Merchants Transfer & Warehouse Co. had held, with only one dissent, that a suit filed within the Kansas limitations period but served after it must be dismissed in federal court, because state law made service an integral part of its limitations scheme, despite Rule 3’s provision that an action is commenced by filing a complaint.24 In Walker, the district court dismissed a claim as barred by the Oklahoma limitations statute, which made service integral in the same way, and it rejected the argument that Hanna had implicitly overruled Ragan.25 The Supreme Court found the case indistinguishable from Ragan, since both statutes require service to toll the limitations period and the Oklahoma provision derived from the Kansas one.26
Rule 3 posed no obstacle. It says only that a civil action is commenced by filing a complaint, and the Court read it to fix the date from which the Federal Rules’ own timing requirements begin to run, not to displace state tolling rules for purposes of state limitations statutes.27 With no controlling Federal Rule, the question fell to Erie’s policies. Whether a federal provision actually reaches the disputed point is the question that comes first in the full analysis below, before any weighing of the aims.
The notable feature of Walker is its concession on forum shopping. The Court acknowledged that failing to apply the state service law might not create any problem of forum shopping, and it concluded that the result would still be an “inequitable administration” of the law.28 The concession is plausible, because a plaintiff who knows both rules can satisfy either with little effort at the outset. The inequity lies elsewhere. In the Court’s words, there is “simply no reason why, in the absence of a controlling federal rule, an action based on state law which concededly would be barred in the” state’s courts should go forward in federal court solely because the parties happen to be of diverse citizenship.29 A student who ends the analysis after finding that no litigant would have shopped for a forum has applied only half of Hanna, since either aim can require the state rule.
Hanna marks the other side of the line, and the comparison teaches because both cases concern service of process. In Hanna it was difficult to argue that substituting the defendant’s wife for the defendant altered the mode of enforcing state-created rights in a fashion sufficiently substantial to raise the equal-protection concern Erie alluded to.30 The minor difference in litigation effort between last-and-usual service and in-hand service did not amount to inequitable administration.31 The label “service of process” therefore decides nothing by itself. What decided each case was what the state rule did to the state-created right: Oklahoma’s requirement determined whether a claim survived under the limitations statute, and the Massachusetts in-hand rule governed only how the papers reached the defendant.
Following state law also presupposes that the federal court can identify it. Federal judges disagree about how freely they may predict that a state’s courts would change course. One Fifth Circuit judge rejected such an approach as “attempting to psychoanalyze state court judges rather than to rationalize state court decisions,” reasoning that the Georgia courts can overrule their prior decisions and the federal courts cannot.32
A rule that decides whether a claim survives, like the limitations bars in Walker and Guaranty Trust, sits at the high end of the range. A difference in how papers are delivered or instructions are given sits at the low end. Only the high-end differences make a federal court’s treatment of a diversity litigant materially different from a state court’s treatment of a citizen.
The Filing-Time Vantage Point
A single rule can look decisive at one point in a lawsuit and trivial at another, so the moment of measurement can change the answer even when the facts stay fixed. York looked at a claim already barred in state court and asked whether a federal court could hear it anyway.34 Hanna looks forward from the start of the case. The test applies properly only when outcome-determinativeness is judged from the vantage point of one choosing where to file, not from the perspective of one filing a motion in the midst of ongoing litigation, and that vantage point aligns with the forum-shopping aim.35
The executor’s argument shows the difference. Measured when he moved, he was right that the two rules pointed in opposite directions: if the state rule applied he prevailed, and if Rule 4(d)(1) governed the litigation continued. The Court granted as much and answered that in that sense every procedural variation is outcome-determinative.36 Looking instead at the plaintiff when she chose her forum, no rule threatened to bar recovery wholly, and meeting the state requirement would have taken only marginally more effort.37 Forum shopping is a decision made before suit, so a difference can encourage it only if a lawyer can see and weigh it then. The backward view asks something else, namely whether the party who missed a step can still cure the miss, and by then the answer is almost always no.
The vantage point also sets how strong an effect a rule must have. A state rule counts as substantive only if applying it is highly likely to change the result, as seen by one choosing where to file. A contributory-negligence bar qualifies, because the lawyer can see that it would entirely defeat a partly careless plaintiff. Rules that may in some instances affect outcomes do not qualify, so state rules on jury selection, the admission of evidence, and the number of peremptory challenges, however important in an individual trial, are treated as procedural.38 A federal practice allowing dismissal with prejudice as a discovery-misconduct sanction, which the state courts do not allow, fares no better. A lawyer choosing a court does not expect discovery misconduct to come, so the sanction’s availability is not highly likely to change the result from that vantage point.
The timeline shows why the forum-shopping aim cannot be the end of the analysis. From the filing vantage point, the choice between the two requirements gave no one a reason to prefer a courthouse. Walker nonetheless required state law, conceding that failing to apply the state service law might create no forum-shopping problem while insisting that the result would be an inequitable administration of the law.39 A student who judges only from the filing vantage point and stops there will predict federal practice where Walker applied state law. Run both aims. Ask first, from the filing vantage point, whether the difference would drive the choice of court, and then ask separately whether federal practice would let a claim go forward that the state’s courts would bar.